Aerosvit Airlines is based in Kiev, Ukraine. It has the largest route network of all Ukrainian carriers, serving destinations throughout Europe, as well as long-haul destinations in Asia and the US. The carrier also operates charter services. The airline suspended operations and entered a period of restructuring in Jan-2013 after filing for bankruptcy on 28-Dec-2012.
Location of Aerosvit Airlines main hub (Kiev Boryspil International Airport)
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Ukraine International Airlines (UIA) continues to pursue rapid expansion in an attempt to fill the void left by Aerosvit, which ceased operations in early 2013. UIA is confident it will secure a 40% share of the Ukrainian market by the end of 2013, up from about 32% currently and about 27% prior to Aerosvit’s collapse.
UIA and Aerosvit previously had roughly equal shares of the Ukrainian market. The carriers competed vigorously domestically, where each had about a 30% share, but had relatively complementary international networks with limited overlap.
UIA’s international network has significantly changed as it has taken over several ex-Aerosvit routes and aircraft. The result is a stronger and more balanced network which for now is focused entirely on short- and medium-haul markets with long-haul expansion a future possibility.
Ukraine’s largest carrier Aerosvit has entered a period of restructuring after filing for bankruptcy on 28-Dec-2012. At the core of the airline’s reorganisation is a large network shake-up which will see rival Ukrainian carrier Ukraine International Airlines (UIA) take over nearly its entire international network.
While UIA stands to benefit significantly, adding at least 30 routes, Aerosvit’s operations will significantly reduce in size. If it survives the bankruptcy, Aerosvit will be left as primarily, or perhaps entirely, a domestic operator.
Aerosvit hopes to continue operating during its reorganisation, which is aimed at restoring the airline’s operational efficiency and improving profitability, and retain five medium-haul and five-long haul international routes. But the airline’s ongoing operations have been disrupted with incidents involving its aircraft being impounded at various airports causing issues across its network.
Ukraine International Airlines (UIA) is planning to expand into the long-haul market in 2013 with widebody aircraft being added for flights to North and Southeast Asia. The eastbound expansion marks a significant milestone for UIA as it will help balance out a western-focused network and help the carrier continue to build its transit hub at the Ukrainian capital Kiev. Asian expansion will also result in more intense competition with Ukraine’s other major carrier, AeroSvit, which already operates widebodies and is planning later this year to double the size of its for now small network in North, South and Southeast Asia.
UIA CEO Yuri Miroshnikov told CAPA on the sidelines of last week’s IATA AGM in Beijing that the privately-owned carrier aims to launch services to Bangkok and Beijing in 2013. UIA is now seeking to lease at least two widebody aircraft to support the new flights, most likely Boeing 777s although A330s are also being considered. 767s, which AeroSvit currently operates to Bangkok and Beijing along with other medium/long-haul destinations, is not under consideration according to Mr Miroshnikov due to their relatively higher seat costs.
Ukraine’s leading carrier, AeroSvit Airlines, is steadily expanding while the Ukrainian Government has been hinting at impending privatisation of its remaining stake in the carrier. The next six months will see the airline significantly increase capacity over summer while continuing to operate significantly more capacity in winter 2012/13 compared to the previous year.
AeroSvit is the largest carrier in Ukraine by capacity with about 30% of total system capacity. Ukraine International Airlines (UIA) is currently the country’s second largest carrier, accounting for about 17% of the overall system capacity.
The Ukrainian Government sold its 61.6% stake in UIA to three existing minority shareholders in Feb-2011 including UIA Beteiligungsgesellschaft mbH, which became the majority shareholder with a 59% stake in the carrier. In May-2012 it was reported that Ukraine's Government plans to sell its 22.39% stake in AeroSvit Airlines in 2012 or 2013. The Government’s stake is currently worth approximately USD542,000.
Asia Pacific, particularly China, is one of the current destination hotspots for European carriers, with connections between Europe and China improving in recent months and over the past couple of years. The initial focus was obviously on providing connectivity between key European hubs and the capital city of Beijing, with services to Shanghai also quite extensive, although a number of carriers are adding service to secondary, albeit still large destinations in China, such as Chengdu, Guangzhou, Hangzhou, Nanjing, Chongqin, Urumqi, Sancha, Dalian and Harbin.
European airlines reported single-digit growth last year - a welcome improvement from 2009's depressed level - but 2010 was a lacklustre year overall. Full year data has been released by the Association of European Airlines (AEA), the European Low Fares Airline Association (ELFAA) and EUROCONTROL. As noted by EUROCONTROL, growth across the continent last year was driven mainly by LCCs.
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