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Russian Federation

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Russian Federation

IATA Code
RU
Airlines
International Airlines serving this country (excluding codeshares)
Airports

The passenger air transportation sector in Russia can be characterised by significant competition. Aeroflot is majority owned by the Russian Government and is the flag carrier and largest airline of the Russian Federation. The three major airports serving Moscow are Sheremetyevo International Airport (SVO), Domodedovo International Airport (DME) and Vnukovo International Airport (VKO). Aeroflot dominates the domestic passenger market in Russia, however other airlines also provide frequent national and international services and they include S7 Airlines, Transaero, UTair Aviation as well as VIM Airlines and Nordavia. The Federal Agency for Air Transport of Russia is the government agency that is responsible for rendering governmental services and managing governmental property in the sphere of air transport (civil aviation) and the usage of air space over the Russian Federation. 

Airports in Russian Federation


 
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Aeroflot: second best 2015 operating margin of European legacy airlines despite Russian recession

4-Mar-2016 3:40 PM

Aeroflot Group's operating profit almost quadrupled in 2015. Among listed European legacy airlines, its 10.6% operating margin placed it behind only Icelandair, but ahead of IAG (these were the only others in double digits). This was achieved in spite of the severe recession in Russia, a nation which has been badly affected by falling oil prices and geopolitical events.

Aeroflot has benefited from the consolidation of Russian aviation and from capacity cuts by foreign airlines. The demise of Transaero accelerated the consolidation process in 2015, and Aeroflot will benefit further from this in 2016. The biggest contributor to the Group's 13% rise in passenger numbers was its low cost subsidiary Pobeda, which completed its first full year of operations in 2015. International transfer traffic through Aeroflot's Moscow Sheremetyevo hub also grew.

This year Aeroflot Group plans an acceleration of ASK growth to double-digit rates. Pobeda has launched its first international routes and the Group's regional airlines Rossiya, Donavia and Orenair will return to growth under the single consolidated brand of Rossiya, helped by routes and aircraft taken on from Transaero. The Group's longer-term goal to become one of Europe's top five airlines looks feasible.

Aeroflot focuses multi-brand strategy as 3Q operating profit doubles, benefits from Transaero demise

4-Dec-2015 11:25 AM

The Aeroflot Group more than doubled its operating profit for 3Q2015 and 9M2015. The weakness of RUB served to inflate both revenue and costs, but these two factors cancelled each other. As with other airlines, low fuel prices helped Aeroflot's results, but the underlying driver of its profit improvement was its growing market share and the positive impact this had on unit revenue.

Already Russia's largest airline group, it is benefiting from the weakness of domestic rivals and capacity cuts in Russia by foreign competitors. It is no longer buying a majority stake in Transaero, but is to take over some of its bankrupt rival's routes and this will further extend its market leadership.

Moreover, a successful first nine months for its LCC Pobeda and a plan to merge three of its regional airlines under the Rossiya brand help to sharpen Aeroflot's multi-brand strategy, making it the leader in each main market segment.

Transaero and Aeroflot Part 1: The airlines have a 70% overlap but the government won't want cuts

18-Sep-2015 4:44 PM

On 3-Sep-2015, Russia's leading airline Aeroflot agreed to an offer from Transaero Airlines' shareholders to sell it at least 75% plus one share of number two ranked Transaero. The price requested for control of the heavily indebted and loss-making airline, to be paid within 24 days, was "no more than" RUB1.

Aeroflot chairman Kirill Androsov hailed the deal's “transformational significance" for the Aeroflot Group, saying it was "fully in line" with its strategy". He added that it should help the group in its aims to carry 70 million passengers by 2025 (compared with 35 million in 2014, versus 13 million for Transaero) and be in Europe's top five and the world's top 20 airlines by revenue and passenger numbers.

Nevertheless, Mr Androsov may have been attempting a brave face. The decision was influenced by a government seeking to maintain market and employment stability and also requires tough negotiations with Transaero's creditors. Moreover, Aeroflot faces a difficult choice. Either it tries to maintain Transaero's unprofitable fleet and network, which overlaps significantly with its own, or it must attempt the politically more challenging closure of large chunks of Transaero's operations. Neither option looks easy.

Aeroflot back in operating profit in 1H. Transaero acquisition to take its market share close to 50%

4-Sep-2015 4:00 PM

The Aeroflot Group turned around an operating loss in 1H2014 into a profit in 1H2015. The depreciation of the RUB served to boost both revenue and operating costs, with a net negative impact, but Aeroflot managed to grow its RASK more rapidly than its CASK.

The Ukraine crisis and tense international relations continue to weigh on demand for travel to/from Russia. But demand for domestic flights is growing strongly.

Moreover, Aeroflot is taking advantage of capacity reductions by cautious international rivals and struggling domestic competitors to increase its leading share of the Russian air transport market. The group's market share now looks set to jump to embrace almost a half of all passengers to/from/within Russia once it completes the acquisition of second ranked Transaero.

Aviation and oil prices: potentially a negative for airport capital expenditure. Time for PPPs?

13-Feb-2015 8:52 PM

The price of a barrel of Brent Crude, the most popular method of tracking oil prices, is today around USD56 a barrel - and this follows a (brief?) rally. A year ago it was trading above USD100.

The falling oil price has already prompted the likes of BP, Shell, Chevron, ConocoPhillips, Russia’s Gazprom and China’s Cnooc to announce cuts in investment. It is occasioned, in the main, by steadily rising supply from non-OPEC countries, and especially from the US, and is, in theory at least, good news for air travellers, if and when airlines feel able to pass on any savings to their customers (assuming they are able to, they may be hedged at higher rates). Some airlines in Southeast Asia and China have already reduced their fuel price surcharge, at least.

But the other side of the industry coin is that some countries may feel the squeeze on their big ticket airport construction projects. Already, they are looking to trim them back. At the very least, smaller construction projects could be postponed or abandoned in many countries, either because the revenues to support them have been reduced or because of declining investment in neighbouring oil facilities and consequential effects on passenger traffic flows, as employees are laid off and executive travel cut back.

This could be the moment when the PPP, already gaining in popularity as a method of ensuring critical airport infrastructure is secured, makes a quantum leap - but the private sector must have confidence in its counterparts in the public arena.

Aeroflot acts to relaunch its LCC project with Pobeda after Group profits fell again in 3Q2014

3-Dec-2014 3:39 PM

The Aeroflot Group suffered a 31% drop in its operating profit and reported a net loss in 3Q2014, the seasonally strongest quarter. Although the net result was weighed down by foreign exchange movements and non-recurring items, the underlying profitability of the Group suffered due to RASK falling while CASK increased.

Demand on international routes has suffered as a result of the geopolitical backdrop, forcing Aeroflot to focus its growth in the domestic market.

Geopolitical events also led to the cessation of Aeroflot's fledgling LCC subsidiary Dobrolet in Aug-2014. However, the Group has acted rapidly in launching a new low cost venture, Pobeda, which started operating between Moscow Vnukovo and Volgograd this week.

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This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.