Russia’s airline industry experiences a boom

Following the collapse of the Soviet Union in the early 1990s, the Russian commercial airline industry was widely written-off by many western analysts, and a severe economic decline, market instability and high unemployment in

Russia raised questions about the industry’s very survival. This situation, however, has changed dramatically and Russia’s airlines have increased passenger traffic by about 9% annually since 2003 and giants, such as flag carrier Aeroflot, are now replacing aging Soviet built aircraft (such as the Tupolev 154) with western planes produced by Airbus and Boeing, and are joining international airline alliances.

Yet the strength of

Russia’s airline industry is even more evident when one looks at just how many major European carriers Russian companies have either bought, or attempted to buy, in recent years. For example, Aeroflot submitted a bid for

Italy’s Alitalia recently, in the hope of expanding into western Europe. While this bid ultimately failed, Aeroflot has now turned its attention to JAT Airways,

Serbia’s flag carrier, which is struggling with a major debt. Aeroflot has allegedly agreed to assume the airline’s debt and some believe that its purchase of JAT may help turn Belgrade’s airport into an important centre of air traffic in

Eastern Europe.

The most successful Russian acquisition of a major European airline has been the purchase of Malev, Hungary’s flag carrier, by investors associated with

Russia’s AiRUnion. This has given the Russian aviation industry prime access to Malev’s existing network of Central and Western European markets, and will also serve as a feeder carrier connecting domestic Russian routes with international destinations.

www.aeroflot.co.uk