New moves towards the emergence of a proper low cost airline industry in Russia

It's been a while since I last updated the Russia section of this blog, but in the last few days there have been some interesting developments (or I should rather say some concretion on plans that have been rumoured already for a while) that might pave the way for the development of a proper low cost airline industry in Russia (possibly the last major country in the World still without one).

The availability of secondary airports offering very competitive conditions to low cost carriers has been an essential part of the American and European low cost airlines success story. Such is the role that Yermolino airport aspires to play in the expected development of a national low cost industry in Russia.

This former military airport in the Kaluga region South-West of Moscow is about 100km. from the Russian capital, which puts it on a par with Ryanair's Frankfurt-Hahn or  Stockholm-Stavsta when it comes to distance to the metropolis it serves. However, continued growth of the Russian air travel market and planned improvements in overland links might help it in this intent.

Actually, we are talking about quite ambitious plans here: Russian airline UTAir, one of the strongest candidates to develop a viable low cost industry in Russia, plans to base up to 20 A320 aircraft at Yermolino! The airline is also interested in getting involved in the management of the airport (something even Ryanair's Michael O'Leary once considered) although it is not sure whether anti-competition authorities would allow it...


In other news, also on the Moscow Times, Aeroflot is one of the best positioned suitors for the 25.5% equity stake in Sibir (aka S7 Airlines) that, as we already reported a few weeks ago,  is now in the market.

Getting S7 opens up some interesting strategic options for Aeroflot, not only would strengthen its presence beyond the Urals, as S7 has bases at Novosibirsk Tolmachevo airport and Irkustk ("the city of Lake Baikal"!) but it could turn S7 into its own low cost carrier. The airline could certainly fit into this role: it has got a fleet composed mainly of A320-family Airbuses plus some Boeing 737-800s and it already flies to many holiday destinations in Europe and Asia. Even the current paint scheme is much in line with the colourful livery-style that low cost carriers tend to sport elsewhere!

Even more important in the long term for the future of Russian aviation might be the fact that Aeroflot is lobbying to get some regulatory restrictions lifted, such as the ban on non-refundable tickets and the ban on hiring foreign pilots, which might help Russian airlines expand while keeping labour costs under control.

In any case, it seems that, if the low cost revolution is to reach the Russian aviation industry, Aeroflot wants to remain the one in command!