Spectacular photo of Moscow at night taken from an airliner

I recently came across a site with amazing photos, all of which had in common that had been taken from aircraft in flight.

I then went to my archive and posted on Twitter what is possibly the best picture I have ever taken from an airplane. I took last winter from a Brussels Airlines A319 on a flight from Moscow to Brussels and it enjoyed an immediate success upon posting it, so I decided to post it on this blog too...I hope you like it!

Why low cost carriers have not taken off in Russia

Russia has had its fair share of revolutions in the last century, but a more recent sort of revolution has totally skipped it: the low-cost airline revolution that has swept through Europe in the past 15 years has barely touched the Russian airline industry, only Sky Express and Avianova seem to have fully embraced the low-cost concept, and these remain really small operators.

To be fair, some European LCC have made timid forays into the expanses of Russia, for example Vueling operates a Barcelona-Moscow flight and so does Air Berlin with some flights to Germany. However, these are little more than anecdotes and the positioning of these two airlines is not that of a pure low-cost, but more of a hybrid model straddling the business and leisure segments of the market.

There are some factors at play that have prevented the development of a low cost airline industry in Russia.

According to Vladislav Filev, chief executive of Russian airline S7, and recently interviewed by Flightglobal, the conditions for low cost aviation simply do not exist in Russia. He mentions long flying sectors between Russia's main cities and lack of secondary airports as deterrents.

These are certainly obstacles on the way, I remain unconvinced about the distance factor being so deterministic, though. Many destinations in European Russia can be reached in a 2-3 hour flight from Moscow and, after all, low cost carriers elsewhere are successfully operating even longer sectors (see Ryanair's new base in the Canary Islands).

Regarding airports, not sure whether it is the lack of adequate facilities (would be interesting to know what is the spare capacity at Russia's regional airports) or rather their pricing policies that are making it difficult for low cost carriers to take off. If we read what Ural Airlines director says about this matter, it seems that airport fees are the obstacle.


No prospects for a low cost airline industry in the short term in Russia, according to Ural Airlines management

Low cost carriers in Western Europe have managed to extract very favourable terms from regional airports wishing to boost their traffic as well as from regional and local authorities. A certain degree of management autonomy is required to achieve such an outcome and I ignore if this is the case in Russia, however, we have the example of two very different countries, Spain and India, where, in spite of their heavily centralized airport management, low cost carriers have flourished in the last few years. Could this happen in Russia too?

Red tape is another story, starting with taxes on imported aircraft, that denies any would-be Russian low cost carrier the flexibility to define its own optimal seat configuration, unless it wants to pay a 20% for the aircraft (just ask Avianova!)

In fact, Russia has moved to abolish import taxes for some types of aircraft, including those on the 110-169 and 220-299 seat ranges, but the restrictions that remain in place are still a considerable hurdle, as they affect configurations that have proven to be popular among low cost carriers elsewhere (as an illustration, Ryanair would have trouble operating its 189-seat Boeing 737-800).

Why then, we do not see Western low cost carriers opening more routes into Russia? I suspect a lot has to do with the regulatory and institutional framework.

In particular flying rights, as there are still frictions between the EU and Russia regarding bilateral agreements regulating who can fly the routes between Russia and each European country. These regulatory framework has been progressively dismantled in with the implementation of the Single European Sky and deregulation has been extended to North American routes (the EU-US Open Skies agreement) and to some of the EU's neighboring countries, such as Morocco, with whom the EU has signed treaties liberalizing air traffic. This has allowed European low cost carriers, particularly the largest, Easyjet and Ryanair, to expand their networks beyond the borders of the EU.

But getting Russia to negotiate such an agreement with the EU as a whole is going to get more complicated, as Russia keeps a stronger negotiating position by talking to each country individually, and in the background there is the still unresolved issue of Siberian overflights, with European carriers paying several hundred million dollars a year to a competitor (Aeroflot) for the right to fly to Asia through the shortest route (over Siberia)

An additional factor must be taken into account: low cost travel relies on independent travelers, and Russia is not an easy market for independent travel. This goes both ways: there is a limited flow of European budget travelers to Russia: visa requirements, the lack of a modern budget and mid-range hotels and the fact that Russia is far from being a mainstream tourist destination, all play a role.

Russians also need visas, this is possibly the main cause that most Russian holidaymakers buy packages supplied by tour-operators that usually include the charter flight. There is obviously an elite that is used to travel independently, but I am not sure that words such as "budget" and "low cost" would be really sell well in this market segment. In summary, not the best environment for the Easyjets and Ryanairs to thrive...

However,the EU-Russia air market is a 10.7 million passenger per year reality and the forecast is that this amount could double in this decade and some new entrants might be needed in order to exploit the full potential of this growing market. In the meantime, talks go on...


Most Russian holidaymakers travel in charter flights, such as those operated by this Transaero Boeing 747

Upcoming airline consolidation in Russia

In Soviet times Aeroflot was the biggest airline on Earth, it had the monopoly of air travel in the largest country in the planet. But in 1991 the Soviet Union broke up, economic and political chaos ensued and air traffic plummeted. Aeroflot's transformation mimicked that of its country and the company was broken up with the formation of over 800 independent smaller companies. Some of these became flag carriers of the newly independent republics, whereas in Russia itself, hundreds of regional airlines were carved out of the assets of the former Soviet Aeroflot. The so-called "babyflots" were born. However, Aeroflot did not disappear, it continued to operate international routes out of Moscow, while the "babyflots" served the domestic market.

The decade of the 90s was a time of turmoil in Russia, with weakened institutions and instability and the airline industry also suffered as a result. The "babyflots" were in great measure responsible for the bad reputation acquired by Russian airlines abroad. These undercapitalized companies, operating small fleets of old Soviet-era planes became famous for their dismal service and appalling safety record.

Aeroflot started to put its record straight in the year 2000 and underwent a modernization and much-needed re-branding. A few years later the improvements are evident. Aeroflot is now operating a fleet of modern aircraft, levels of service are now on a par with Western airlines and even its corporate website has a fresh and innovative look. It also helped that the Russian economy has been growing steadily in the last decade, with total passenger numbers in Russia more than doubling in 10 years, from 21 million in 2000, to over 45 million in 2009. Still a fraction of what it was in Soviet times (roughly half the number achieved during the peak year of 1990) but on upward track.

So we have a stronger and more modern Aeroflot in 2010, but...what happened to the “babyflots”?

Financial attrition and safety issues have taken its toll, as I write this post the numbers are down to 168. This is still too many according to the chief executive of Aeroflot, Vitaly Savelyev, that in a recent statement said that the country could do much better with 30 to 35 larger and more financially stable airlines.

The authorities have started to pilot this consolidation process, with Aeroflot becoming the vehicle for the consolidation of the air transport sector in Russia. The Russian flag-carrier is expected to take over a large number of the “babyflots”.
Back to the origins.


Picture: Russian airliners at Domodedovo airport, Moscow. An Orenair Boeing 737 in the foreground whereas a large number of old Soviet aircraft, that used to make up the fleets of Russian domestic airlines, can be seen in the background, among them, in the center of the picture, two Ilyushin Il-62

The first wave of consolidation is already under way, Aeroflot is taking over a group of six airlines: Rossiya, Orenair, KavminVodyAvia, Vladivostok Avia, Saratov Airlines and Sakhalin SAT Airlines. The first step will involve state-owned Rossiya airlines taking over the other five soon-to-merge airlines and then being absorbed itself by Aeroflot. But this might just be the beginning, as we can expect tens of other smaller Russian airlines to be absorbed by Aeroflot in the near future.

This raises some interesting questions about the future of civilian aviation in Russia: what would be the competitive landscape ten years from now?

What would be the role of the main private carriers (namely Transaero and S7) in a market where state-controlled Aeroflot will be acting as a “national-champion”?


An S7 Airbus A320. S7 is currently the airline that carries more passengers domestically in Russia


What would be the implications for the aircraft manufacturers Boeing and Airbus and their chances to capitalize on the emerging Russian market, if a larger Aeroflot became the launchpad for the reemerging Russian civilian industry? Recent decisions regarding the upcoming launch of the Irkut Ms-21 and Sukhoi Superjet 100 point already in this direction.

And what will be the prospect of ever getting a sizable low-cost aviation market in Russia? Some recent upstarts like Sky Express have tried to enter this segment, that remains practically non-existent in Russia. Will the authorities allow low-cost carriers to challenge incumbent airlines in the same way it has been done in the West?

Many questions that I will try to answer in upcoming posts...

Planespotting at Domodedovo

We are at Moscow's Domodedovo airport, after a really intense week, ready to board our British Airways flight to London. While I look through the windows at the waiting lounge I realize what an exciting place for plane spotting can a Russian airport be.

At most Western airports, for example, around 95% of the planes are either Boeing 737 and those of the Airbus 320 family, in airports with a large number of long haul flights, like Heathrow you can also see Boeing 747s and 777s and 767s or Airbus 340s and 330s. But at a Russian airport you can see all of these plus a whole range of old soviet-era planes, new Russian planes and second-hand Western planes. This picture is a great example of the situation of aviation in Russia.

Let's have a closer look: in the foreground an old soviet-era Tupolev 134 of Rossiya Airlines, next to it an Airbus 310 of S7-Sibir Airlines, one of the largest domestic airlines in Russia. The A-310 although not a particularly old model is hard to see in Western airports as it was not as commercially successful as the A-320 and A-330 models. Further away is another S7 plane, an Airbus of the A320 family. Russian airlines have been adding new Boeing and Airbus planes that are progressively replacing the old soviet models.

We can also see 2 planes from Transaero, Russia's second international airline (the first is Aeroflot), a Boeing 767 (right) and a Boeing 747-200 Jumbo (left), two wide-body long range planes that probably transport Russian tourists to resorts in the Mediterranean, that are popular destinations from Domodedovo.
In the background there is a large number of parked planes and, although it is difficult to tell from this picture, they are mostly soviet-built. For example, just behind the tail of the S7 Airbus 310 there is an Ilushyn IL-96, the Russian equivalent to the Airbus 340, of relatively new design, but that has experienced some problems that have prevented it from selling in larger numbers.

In summary, quite an interesting mix, that is probably going to become more homogeneous, as Russian carriers update their fleets, but as the restructured Russian aircraft industry gets back to the market with new models, it might continue to be more diverse than in the West.