Russia's disaster-plagued Aeroflot eyes launch of budget carrier

Russia's vast expanse makes idea of low-cost carrier attractive, but regulations stand in way

PUBLISHED : Monday, 12 August, 2013, 12:00am
UPDATED : Monday, 12 August, 2013, 4:41am


A Russian budget airline? The thought may fill some travellers with dread, but flag carrier Aeroflot is taking serious steps to launch the country's first sustainable low-cost airline.

Aeroflot has made huge strides in recent years to lay to rest its image as a disaster-plagued Soviet carrier, becoming a member of the Sky Team alliance and winning international awards for its service.

And now it wants to take another step by creating a Russian equivalent to easyJet or Ryanair, whose success transformed travelling habits and the aviation industry in Europe.

Aeroflot announced the plan for a budget subsidiary after a board meeting in late July. But crucially, setting up the budget airline is still dependent on changes to Russia's aviation regulations, which are stricter than in Europe.

The airline, which still controls 40 per cent of the Russian aviation market, is hoping from next year to launch its first budget routes from Moscow to Saint Petersburg and to cities in the south of Russia.

According to the daily newspaper Vedomosti, the new Aeroflot subsidiary, whose name has yet to be unveiled, plans eventually to serve international destinations including Kiev, Yerevan, Istanbul and Barcelona with a fleet that will comprise 40 planes starting with Boeing 737s.

Analysts point to the fact that many Russians are still making long journeys across the vast country by train - often lasting several days - and may be easily tempted to fly if the ticket prices are lower.

Russia's third-biggest airline UTair is also planning to set up its own low-cost carrier. "People consider more and more that their time is precious and they are going to want less and less to spend two or three days to get anywhere," its chief executive Andrei Martirossov said.

EasyJet has begun flying between Moscow and London, while Hungary's Wizz Air will follow next month with flights between Budapest and Moscow.

Aeroflot would seek to reduce costs to a minimum, sell non-refundable tickets and only through the internet, and charge for checked-in baggage and food.

The problem is that Russia's stringent aviation rules outlaw many such aggressive cost-saving practices. The law also forbids the hiring of foreign pilots, a major problem in a country whose aviation boom had led to a shortage and consequent high pay.

"As long as the law does not change, absolutely nothing is going to fly. We are not going to take the risk," Aeroflot chief executive Vitaly Saveliev told state television.