Russian Transport Minister, Igor Levitin, stated several Russian regional carriers could be rolled into a single state-owned joint-stock company and then eventually merged with Aeroflot (UPI/Reuters/Moscow Times, 02-Feb-2010). The regional carriers could reportedly include St Petersburg-base Rossiya (and carriers merged under it) as well as Kavminvodyavia and Orenburg Airlines, which would initially be jointly managed by the state-owned Russian Technologies and Aeroflot. The plan could reportedly be completed by the end of 2010 and would increase Aeroflot’s domestic market share from approximately 15-18% to 30-35%. An existing plan to merge Rossiya and the AirUnion carriers (including Vladivostokavia, Saratov and Sakhalin Airlines) into a new carrier, tentatively named RosAvia, under Russian Technologies has been delayed a number of times and has been strongly opposed by Aeroflot. The AirUnion carriers were acquired by Russian Technologies in Sep-2008.
Six Russian regional carriers to be rolled into Aeroflot
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The big five can be expanded into a big seven to include Turkish Airlines and the Aeroflot Group, although these two had contrasting growth rates in 2016. A chasing pack of middle sized airline groups includes three LCCs (Norwegian, Pegasus and Wizz Air) and three legacy airlines with varying challenges to establishing sustainable profitability (SAS, Air Berlin Group and Alitalia).
Most of the faster growing airline groups in the top 20 are LCCs and the main growth drivers for Europe's big three legacy groups are their LCC subsidiaries. Just outside the top 20 are some fast growing legacy airlines in Eastern Europe, demonstrating the potential there. Nevertheless, unless there is a big merger or acquisition, Ryanair looks set to remain at number one for some time.
S7 Airlines Part 2: history of growth in fleet, pax, revenue & profit shows benign market structure
Part 1 of CAPA's analysis of the S7 Airlines Group examined its network and competitive positioning, particularly with respect to the Russian market leader Aeroflot Group. Away from its Moscow Domodedovo hub, S7 has pockets of strength serving cities in Asia from regional Russian airports.
This second part of the report on S7 highlights its respectable track record of growth in its operations and profitability since the establishment of its subsidiary Globus in 2008. In 8M2016 its passenger growth rate accelerated to 25%, after a 6% increase in 2015. Although demand for international air travel to/from Russia has slumped due to geopolitical developments, S7 has benefited from growth in the domestic market and from capacity cuts by foreign competitors on international routes. It has also benefited from the 2015 collapse of Transaero (although Aeroflot has gained more from this).