AEROFLOT COMMERCIAL
By 2025, the airline intends to be among
the five biggest European carriers in terms of
revenues and passengers carried. In 2016,
it was ranked fifth and seventh on these
measures respectively, having carried 43.4
million passengers, recording RUB 495.9
billion revenues and posting RUB 38.8 billion
net profit.
The airline’s revenues and passenger
numbers have been growing at a
sustained double-digit rate over the
last five years, while adjusted net profit
has also been improving every year.
With the current pace of growth,
it seems the group might
achieve its goal well
ahead of the target.Benefitting from challenges
The astounding growth rate of Aeroflot in the
last few months has been enabled by the
very same factor that many saw as a serious
challenge to the airline’s business: economic
crisis in Russia.
One of the most important points
was the depreciation of the ruble. The
Russian currency lost nearly half of its
value to the dollar in the second half
of 2014 and has been priced very low
ever since. Despite a slow increase in
its value since the low point in January
2016, the ruble is still worth around 40%
less than three years ago.
While that is bad news for Russian
importers, the airline benefits from it,especially in combination with lower fuel
prices. The Aeroflot press bureau told AIR
International: “We managed to convert
the market instability into our competitive
advantage,” referring to the fact that a
significant share of the airline’s revenues is
in dollars, while most of the costs, including
fuel, are paid in rubles.
In 2016, Aeroflot’s operating costs
totalled RUB 432.6 billion, a 16.6%
increase over 2015. However, fuel costs, by
far the biggest single expense, increased
by only 7.6% to RUB 101.6 billion.
Combined with the total capacity growth
of 10.4%, (measured in available seat
kilometres) this means the unit fuel cost
went down by 2.5%.A Time of Growth