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Russia's low air travel penetration augurs well for the aviation market - and for Aeroflot

Analysis

Market consolidation and a dominant role for Aeroflot have produced the foundations for what is now a sustainable domestic Russian industry.

But it has come at a cost. Russia's aviation remains heavily concentrated around Moscow and availability of low prices has meant that many potential air travellers are still surface-bound.

As Aeroflot plans its own new LCC subsidiary, there are changes afoot which promise considerable upside in air travel for this potential-rich country. The long-established carrier should again find itself in a strong position to expand profitably, even where new entry occurs.

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