Some thoughts on Transaero and its bankruptcy



The Transaero bankruptcy saga is one of the biggest aviation-related stories coming out of Russia in quite some time.

This blog has covered the whereabouts of Russia's second largest airline, and first private one, quite a few times. It was one of the first private airlines to emerge successfully from the big transition to the market economy and, to its credit, delivered quite a good value service across its wide network. 

Will miss it!

Will miss it!

Transaero had quite a unique character that showed up in little details, like playing the airline anthem upon boarding, distributing always candy before flights, introducing first ("Imperial") class on European flights or placing its aircraft at the disposal of all sorts of charitable causes, be it  the "Flight of Hope" or the preservation of the Siberian tiger.

Already last December there were obvious signs that not everything was alright with Transaero, a situation that was temporarily sorted with government support, nevertheless, the airline managed to carry on, went ahead with its rebranding and kept adding new aircraft (albeit from pre-crisis orders).

That is until last September when the news came out that Aeroflot was acquiring 75% of Transaero to save it from fact, I had started writing a post about this operation, when events quickly caught up.

If there is not last minute twist of the events (which can never be entirely ruled out in Russia), the Aeroflot acquisition is not going through, instead Transaero will go bankrupt with all flights stopping on December 15th.

In fact the wind-up of what was just one year ago a fast growing airline, has already started, with its website stopping flight sales and its flight programme is already being reduced.

No more tickets for sale...

No more tickets for sale...

It looks like this is far from being the end of this story though, as many points remain unclear:

Who is going to absorb all of Transaero's capacity, are we going to move to a monopoly situation, as The Economist's Gullliver expects? or smaller private airlines like S7 and Ural Airlines (UTair is going through financial problems of its own) will have their chance to grow (although without a chance, really, to being a strong rival to Aeroflot). 

There might be some reduction of capacity on trunk routes, but some solution might have to be provided for several destinations in the Far East of Russia and even Central Asia, that were served almost exclusively by Transaero.

Also I guess it is going to mean goodbye to Transaero's "oldies", the Boeing 747-400s that were a common sight at many sunny destinations around the Mediterranean, the Boeing 767s and Boeing 737-400s. Newer aircraft like the Boeing 737-800s and Airbus A321s should have no problem finding new operators, even within Russia...oh, and those four A380s on order, the first on the Russian market, simply is not going to happen.

And, as always in these cases, also a personal drama for the thousands of employees, as current economic conditions in Russia are far from ideal, even more so in the airline industry.

Finally, wondering how Vnukovo airport is going to fill the huge gap left by Transaero, specially if Aeroflot absorbs part of its market from its Sheremetyevo hub, maybe the expected growth of low cost airline Pobeda in the coming months and years will help. 

But not everyone has given up hope, though, a petition has been launched on to ask the Russian government to prevent Transaero from going effectively bankrupt, a petition that at the time of writing these lines had obtained 128,000 people had supported it, getting close to the 150,000 goal.