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Russian aviation: Pobeda's growth will spark LCC competition

Premium Analysis

Right across the globe, long haul traffic and business travel are suffering the most in the COVID-19 crisis, while short haul and leisure traffic (more specifically, visiting friends and relations) are leading the recovery. This works to the strengths of low cost operators, and Europe's big LCCs (with the exception of Norwegian) are mainly performing better than their full service competitors.

Russia has Europe's biggest domestic market, where capacity grew back above 2019 levels in the peak summer weeks of 2020. This has helped Russia to become Europe's biggest aviation market by total seats, with 50% of 2019 capacity operating in the week of 23-Nov-2020. This is more than any other leading European country, and compares with an average of 26% for all Europe.

The strength of Russia's domestic market, and increased price sensitivity among consumers, has given a boost to Pobeda, Russia's only LCC. Since Jul-2020 the Aeroflot Group subsidiary has achieved positive year-on-year growth in passenger numbers for four successive months. Other Russian airlines are now considering the LCC model too.

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