Aeroflot CEO, Vitaly Savelyev, stated the carrier may launch a subsidiary LCC, as part of its plans to dominate the domestic market (St Petersburg Times, 13-Apr-2010). Mr Savelyev expects the carrier to become one of Europe’s ten largest airlines, with 20 million passengers p/a, once six regional airlines (from state-owned conglomerate Russian Technologies) come under its control in 2011. Although details of the handover are not yet finalised, Aeroflot is reportedly considering integrating the other carriers’ operations with its own. The carrier may also launch a separate charter flight operator, while Aeroflot would remain a premium-class airline. The carrier stated it would expand into Moscow's Sheremetyevo Airport new Terminal E, scheduled to open in 2Q2010, in addition to its operations in Terminals D and F. Mr Savelyev said the company may float some or all of the 19.5% stake in the carrier currently owned by Alexander Lebedev on the open market once a deal to repurchase the shares is finalised. Aeroflot has bought back 6.3% of Mr Lebedev's shares and plans to acquire the remaining shareholding. Mr Lebedev’s National Reserve Corporation last week stated that it may change its mind about the sale. Alternatively, Aeroflot could use the repurchased stake as part of the agreement to acquire the regional carriers from Russian Technologies.
Aeroflot considers LCC, aims to be one of Europe’s top ten
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Until 2014 Turkey was one of the most reliably fast-growing air traffic markets in Europe. In 2015 passenger numbers levelled off, and in 2016 traffic is set to decline. The impact of geopolitical events, including a series of terrorist attacks, the civil war in neighbouring Syria and the failed coup attempt in Jul-2016, has weighed heavily on demand for international travel to/from Turkey.
Foreign airlines switched capacity away from Turkey in summer 2016, but the country's two largest operators – Turkish Airlines and Pegasus Airlines – continued to grow. However, following years of double-digit growth by both, Turkish Airlines and Pegasus Airlines are taking unusual steps this winter. According to data from OAG, Turkish looks set to implement year-on-year capacity cuts, while Pegasus appears to be planning flat capacity for the period from Nov-2016 to Mar-2017. It seems likely that both airlines will again cut their growth targets for 2016.
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European airlines: 1H2016 results show a widening gap between the haves and have-nots
The last of Europe's leading listed airline groups reported 1H2016 results on 19-Sep-2016. This now allows analysis of the aggregate trends for the 15 largest European airline groups listed on the stock market that publicly report financial results for the first six months of the calendar year. These groups account for 53% of ASKs flown to/from/within Europe by all airlines and 71% of ASKs flown by European airlines (week of 19-Sep-2016, source: OAG).
Collectively, these 15 groups enjoyed an improvement in operating margin in 1H2016 versus 1H2015. This was achieved in spite of heavy downward pressure on unit revenue – thanks largely to lower fuel prices, which allowed them to cut unit costs more rapidly. However, there was a wider range of levels of profitability in the individual results compared with last year.
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