Ukraine International Airlines to cut fleet by 25% but network expansion continues

Ukraine International Airlines (UIA) is cutting capacity and reducing the size of its fleet in response to the challenging conditions in its home market. But UIA continues to expand its network with several new destinations to be added in 2014. The new destinations all have a high component of transit traffic as UIA seeks to offer more connections in a bid to offset declines in existing segments.

While UIA is significantly impacted by the crisis in the Ukraine its long-term outlook remains relatively bright. The early 2013 demise of AeroSvit left UIA as the only major Ukrainian carrier and UIA is now benefitting as much smaller and weaker competitors suspend or reduce operations.

UIA passenger traffic grew by over 60% in 2013 as it rapidly expanded its network and fleet to the fill the void left by AeroSvit. Traffic, load factor and profitability will decline in 2014 but UIA has the scale to survive.