Pobeda's return to traffic growth points way for Aeroflot Group

Aeroflot's LCC subsidiary Pobeda was the only significant European airline to carry more passengers in Jul-2020 than in the same month a year previously. By the final week of Aug-2020, Aeroflot Group had returned 63% of its prior year seat numbers into the market, compared with 45% for the European airline market as a whole.

The group is benefitting from the Russian domestic market, which is Europe's biggest and was back above 2019 capacity levels in Aug-2020. Pobeda's growth also demonstrates the importance of low cost short/medium haul operations in a recessionary environment and one with only limited long haul opportunities.

Aeroflot Group is looking beyond the recovery into the medium to long term. It aims to more than double annual passengers to 130 million by 2028, with Pobeda significantly the group's main growth driver. Aeroflot itself aims to reinforce its premium branding with a five star Skytrax rating. Heavy 1H2020 losses were a reminder that there is still a crisis to face, but the group increased its liquidity (partly thanks to state aid).

In spite of near to medium term uncertainties, Aeroflot's future as Russia's leading airline group looks assured.