No joke: Aeroflot plans budget airline
Once the butt of jokes about vodka-fueled pilots and inedible in-flight meals, the Russian state carrier, Aeroflot, is planning to launch a budget airline along the lines of easyJet or Ryanair.
Spotting demand in a country in which many people cross vast distances -- slowly -- by train, the airline is hoping to launch budget fares from Moscow to St. Petersburg and cities in southern Russia as early as 2014, according to eTurboNews.
Aeroflot already has low-cost competition in Russian airspace. In March, easyJet launched flights between Moscow and London, and next month Hungarian airline Wizz Air will begin flying between Budapest and the Russian capital.
Another Russian carrier, UTair, is also planning to set up a budget airline.
Aeroflot has gone a long way in overturning its Soviet-era image as a carrier that few who didn't have to would fly on, joining the Sky Team alliance -- whose members include Delta and Air France -- and winning awards for its service.
A low-cost version of Aeroflot, however, faces multiple barriers to success.
Budget carriers have been tried, and have failed, in Russia before. In 2006, the late, exiled oligarch Boris Berezovsky founded SkyExpress -- flights spluttered to a halt five years later when the airline ran out of revenue.
American-backed carrier Avianova launched in 2009 with a strategy, as described by its then CEO, to “[fly] those Russians who haven't even seen the inside of an airplane in the past 20 years."
Despite advertising domestic tickets for as low as 250 rubles (less than $10), it accrued debts of $38 million and ceased trading after only two years.
Russia lacks several important ingredients budget airlines have traditionally relied upon.
First, cheap airports.
Moscow’s Sheremetyevo Airport, for example, is the 12th most expensive in the world -- four times as expensive as Hong Kong International Airport, according to Russia Beyond the Headlines website.
Second, neither do airplanes come cheap in Russia. Taxes and duties on the fuel-efficient budget favorite Airbus A320 can account for more than 40% of its cost.
Finally, Russian airlines are legally required to provide passengers with certain services such as in-flight meals -- a rule that would no doubt give Ryanair boss Michael O’Leary apoplexy.
To get around these barriers, Aeroflot’s so far unnamed low-cost operation will rely upon strategies including selling non-refundable tickets online only, introducing baggage fees and hiring less expensive foreign pilots.
However, Russian law currently restricts these practices, too.
"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 Russian TV.
Cherished subject of airline satirists that it was, Aeroflot may never have fully deserved the dubious image it long trailed behind it.
“Once upon a time, measured in raw crash totals, Aeroflot had a comparatively poor record,” says Askthepilot.com.
That record isn't entirely surprising given that, for much of its 90-year history, the airline was the largest in the world and flew to remote, risky destinations such as the Antarctic.
In any case, Aeroflot apparently hasn’t let its history temper its ambition. If it can overcome the legal obstacles to its domestic operation, it hopes to launch budget flights to destinations beyond Russia, including Kiev, Istanbul and Barcelona, the South China Morning Post reported.