United Aircraft Corporation's Board (UAC) met (02-Mar-2010) to consider solutions for the company's financial deficit and approved financial and aircraft production plans for 2010 and for the 2011-2012 period. UAC's debt stands at EUR1.7 billion, with EUR597.5 million to be repaid through Russian Federal Government funds injected into the company in 2010. The remaining EUR1.1 billion will be restructured and repayed with corporate bonds secured by Federal Government guarantees. UAC will receive government guarantees and the state subsidies for 100% of the interest payments on this restructured debt. UAC delivered 95 aircraft to customers in 2009 and plans to deliver 120 aircraft in 2010, increasing by approximately 20% p/a until 2012, by which time it expects to be producing 200 aircraft p/a. [more]
UAC to restructure debt with government guarantees, to get EUR600 million fund injection
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This second part of the report on S7 highlights its respectable track record of growth in its operations and profitability since the establishment of its subsidiary Globus in 2008. In 8M2016 its passenger growth rate accelerated to 25%, after a 6% increase in 2015. Although demand for international air travel to/from Russia has slumped due to geopolitical developments, S7 has benefited from growth in the domestic market and from capacity cuts by foreign competitors on international routes. It has also benefited from the 2015 collapse of Transaero (although Aeroflot has gained more from this).
S7 Airlines Part 1: Russia's #2 airline's main focus is domestic, with pockets of strength in Asia
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Moscow Domodedovo is S7's biggest airport and its main hub for the domestic market, which accounts for around two thirds of its seat capacity. Domodedovo is also its hub for international routes to Europe (mainly Eastern and Central Europe). Although it is the biggest airline at this airport, on a city pair basis on many routes from Moscow there is significant competition from the market leader Aeroflot, whose main hub is Sheremetyevo.
However, S7 also has a noteworthy network to cities in Northeast and Southeast Asia from regional airports elsewhere in Russia, in particular Novosibirsk and Vladivostok. Competition on these Asian routes is much less severe: indeed, S7 is the only operator on the majority of its routes to NE/SE Asia and its position is further boosted by codeshares (including with Aeroflot).