The second largest airline in Russia, S7 Airlines, announced a plan to launch a new budget airline in the market that is known to be underpenetrated by low-cost carriers (LCCs). The maiden flight of the new Russian lowcoster is scheduled for July 2022.

The airline’s fleet will entirely consist of Airbus A320neo aircraft. In the first three years, Russia’s low-cost newbie plans to increase its fleet by taking deliveries of six or eight aircraft annually. By 2024, S7 Airlines’ new low-cost arm will have more than 20 aircraft in its fleet.

“We see great potential in the interregional transportation segment, which we cannot cover within the current S7 Airlines business model,” said Tatyana Fileva, a shareholder of the S7 Group. “The airline operating on the low-cost airline model can just take this market share.”

The route network will be focused on direct interregional flights within Russia. According to S7 Airlines, the Ministry of Transport of Russia “also drew attention to the need to create another low-cost airline”, which could improve accessibility from Central Russia to other regions. 

“The creation of a new low-cost airline will largely satisfy the population’s demand for low-cost flights in Russia,” the Minister of Transport of the Russian Federation Vitaly Savelyev explained.

S7 Airlines anticipates carrying around one million passengers with its new low-cost carrier in the first year of operation, and starting from 2024 it is expected to reach the number of six to seven million passengers.

Currently, Russia has only one low-cost carrier – Pobeda – a subsidiary of the state-owned Aeroflot.