Aeroflot doubles down on ultra-ambitious plans
The strategy which sees Aeroflot group having 130 million annual passengers, 600 aircraft and a five-star airline, yet 30% cheaper domestic flights by 2028 was confirmed in the latest board meeting.
Plans are laid out for a period after 2023. According to earlier strategy, published in 2018, by 2023 Aeroflot group should already have 100 million passengers annually. In 2019 it had just over 60 million passengers, 9% increase on 2018 numbers, and operated 359 aircraft.
Aeroflot’s CEO Vitaly Savelyev revealed a glimpse of their plans in a conversation with Russian Prime Minister Mikhail Mishustin on July 14, but the details were not confirmed until the company’s latest press release.
According to the document, the strategy proposes greater divergence between various airlines of the group: low-cost carrier Pobeda will take the brunt of traffic increase, expecting 55-65 million passengers in 2028, far-cry from 7 million in 2018. Rossiya will further focus on government-subsidized internal flights to unprofitable locations.
As the parent carrier, Aeroflot itself will shed much of its regional market and focus on premium appeal and long-haul flights hoping to acquire five-star SKYTRAX rating. Aurora, another Aeroflot’s subsidiary servicing the Russian far-east, is set to retain its status-quo.
“The main points of the strategy were conceived in late 2019. Newest set of challenges, imposed by the pandemic, just confirmed what we knew all along: we have found the right way to transform our group,” said Mr. Savelyev. According to him, Aeroflot was well suited to reconquer its market after the COVID-19 imposed crisis ended, and would do so faster than competing airlines mainly due to lack of restrictions on flights within Russia and close support of the government.
The group expects full recovery of its domestic flights by the end of the year and return to 80% international capacity. Russia’s government has already provided Aeroflot with a comparatively modest bailout of $1 billion.
Another “strategic” focus of the new plan is the increased use of domestically-produced aircraft, which are set to compose more than a third of the company’s fleet. Aeroflot is to receive 150 of Sukhoi Superjet 100 and over 50 of MC-21. Under the new strategy, all of them will operate with Pobeda and Rossiya.
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