Aeroflot

Belarus aims to privatise Belavia in 2013, with Russian carriers the most likely suitors

Belarus and its aviation industry have come under the spotlight in recent months, not least for its air services dispute with Russia which led to the temporary suspension of all Minsk-Moscow services in late Mar-2012. Discussions regarding the privatisation of national carrier Belavia have also been occurring, with the privatisation likely in 2013 according to Belarus’ Transport Minister. Aeroflot is rumoured to be interested in purchasing the carrier, although other Russian companies are also reported to be interested.

In Apr-2012 the subject of Belavia’s potential privatisation emerged after the Belarusian Government revealed plans to convert state-owned transportation enterprises into open joint stock companies by 2015. Belarusian Transportation Minister Ivan Shcherbo confirmed Belavia was included in these plans with privatisation most likely to occur in 2013.

Russian market remains strong as Aeroflot to start Moscow-Miami service

While western Europe remains in the doldrums, signs are more positive in the east and especially in Russia, where state-owned Aeroflot and competitor Transaero have in the past two years recorded growth rates in excess of 25%. The trend is continuing, and Aeroflot's latest long-haul destination – Miami – will see thrice-weekly A330-200 service commence 30-Oct-2012. Aeroflot competitor Transaero, which has a stronger leisure focus, already serves Miami, albeit with a twice weekly Boeing 777-200 service.

Rapidly expanding Kenya Airways charts growth with plan to serve every inhabited continent by 2017

Kenya Airways plans to launch its first services to North America, South America and Australia by 2017, making it one of the few carriers to serve every inhabited continent. While these three continents will give Africa's currently fifth-largest airline by seats a global presence, its future is pegged on Asia, with the carrier over the next 10 years planning to launch seven new routes into China, six in the Indian Subcontinent and three across North and Southeast Asia as well as having a growing presence in Europe and the Middle East. It is poised to become Africa's largest carrier.

Growth will be fuelled by Africa's status as a burgeoning market, as well as reliance on partners: Kenya Airways will open routes to SkyTeam member hubs in Xiamen (Xiamen Airlines), Hanoi (Vietnam Airlines), Seoul (Korean Air), Moscow (Aeroflot) and Prague (Czech Airlines). The intercontinental focus follows Kenya's strong emphasis on regional Africa, with the carrier aiming to serve every African nation by the end of 2013. 

Transaero seeks services to France and Italy following expanded bilateral agreements

Transaero is continuing to encroach on Aeroflot’s territory with the recent expansion in capacity as part of revised bilateral agreements between the Russian Federation and Western Europe. Traditionally, Aeroflot, as the Russian flag carrier, was the only airline allowed to operate key international routes from Moscow, however, this is beginning to change with expanded bilateral air services agreements with other nations that allow for a second carrier to compete on particular routes. Most recently Russia’s Federal Air Transport Agency held negotiations with Italy and France for the liberalisation of air services, which will see each country allowed to have a second carrier compete on key routes.

Aeroflot goal of 36% Russian market share by 2015 seems achievable following string of acquisitions

Russia’s largest passenger carrier Aeroflot is entering 2012 with a clear aim in sight of achieving 36% market share in Russia by 2015 and 40% market share by 2020. This goal is looking increasingly achievable as the planned takeover of more Russian regional carriers will give it a 33% share of capacity in the market.

Fleet expansion at Aeroflot is planned to ensure further increases in market share over the next several years. The flag carrier’s outlook for 2012 and beyond is also looking bright after recording strong results for the nine months ending Sep-2011.

Aeroflot initially revealed on Oct-2011 plans to increase its market share to 36.3% by 2015, 40.4% by 2020 and 45.4% by 2025. To meet these goals, Aeroflot is increasing its expenditure over the next several years. In 2012, there will be further aircraft acquisitions and network development, both internationally and domestically.

Russian network airline traffic continues to rebound, but without LCCs

Russia is becoming a serious force in aviation through the significant growth reported in both passenger and cargo transportation over the last 11 years. It is no surprise, partly considering the massive land area the Russian Federation covers, that aviation is increasingly seen as an efficient way for mass transportation of people and goods across the nation and further afield.

2009 saw the first decrease in passengers carried in the century’s first decade, with numbers declining 9.5% to 45.1 million. However starting in the following year, traffic rebounded with positive figures reported in 2010. The rebound is continuing in 2011, according to the latest traffic figures released by Russia’s Federal Air Transport Agency. The figures show overall growth in both passenger and cargo volumes in the 10 months to Oct-2011, including a 12.3% year-on-year increase in passenger numbers.

This growth comes from the nation’s network carriers, with low-cost operators making hardly any noise in the market. Despite the ever-increasing demand for air travel, Russia still does not have a significant level of low-cost carrier penetration from home or foreign carriers, and the LCC sector took a step back earlier this year with the bankruptcy of Avianova.