Having transferred its Moscow operations from Vnukovo to Moscow Sheremetyevo, Avianova is now considering establishing a base in St Petersburg. What is the strategy for Avianova? Routes News investigates.
Avianova is a low-cost carrier, which, until recently, had its only base at Moscow Vnukovo Airport. It has since transferred its three A320 aircraft to Moscow Sheremetyevo from which it operates 71 weekly flights. It is the third largest carrier in terms of weekly seats in a market that is dominated by SkyTeam member Aeroflot.
The table below shows the five largest carriers at Moscow Sheremetyevo:
|
Carrier |
Weekly Seats |
Destinations |
Market Share |
|
Aeroflot |
154,395 |
94 |
64% |
|
Nordavia |
11,865 |
12 |
5% |
|
Avianova |
10,366 |
11 |
4% |
|
Aerosvit |
7,652 |
5 |
3% |
|
Donavia |
7,634 |
6 |
3% |
|
Others |
49,513 |
21% |
|
|
Total |
241,425 |
122 |
100% |
Flightbase June 14-20, 2010
Avianova is currently building its base at Sheremetyevo, feeding seven eastbound destinations through Sheremetyevo and four southbound destinations, all of which are domestic. The low cost carrier operates seven destinations that Aeroflot also serves from Sheremetyevo showing that it is prepared enter markets that the dominant airline already serves. However, all of these services that compete with Aeroflot are low frequency and Avianova will hope to increase its frequencies to increase its market share.
Moreover, Avianova will hope to stimulate traffic in a market where the propensity to fly is still low. With no low cost carrier operating at Moscow Sheremetyevo, Avianova will be well placed to do this. Its decision to enter operate from Moscow Sheremetyevo gave the carrier access to a larger market that at Vnukovo, but more importantly to a more established airport in the Moscow region. There are 1643 weekly flights from Sheremetyevo operated by 38 carriers, compared with 931 weekly departures from Moscow Vnukovo served by 18 carriers.
Avianova also faced competition in the low cost sector from SkyExpress at Moscow Vnukovo which was Russia's first low carrier. At Vnukovo, SkyExpress operates six destinations that Avianova now operates from Shermetyevo, Avianova considered Vnukovo as too small a market for two low cost competitors to compete on the same city pairs, facilitating its decision to switch to Sheremetyevo which also now has a dedicated low cost facility for domestic flights.
Why St Petersburg?
Avianova hopes to base 20 aircraft at Sheremetyevo and 20 aircraft in St Petersburg. The carrier is aiming to operate a dual base strategy in the two mass markets in Russia, Moscow and St Petersburg. The St Petersburg market is half the size of the Sheremetyevo market with 895 weekly departures compared with 1643 at Sheremetyevo, however portrays similar characteristics in terms of having a dominant home airline in the shape of Rossiya Airlines and a low percentage of low cost traffic.
The leading carriers in St Petersburg are summarised below;
|
Carrier |
Weekly Seats |
Destinations |
Market Share |
|
Rossiya Airlines |
47,331 |
70 |
42% |
|
Aeroflot |
15,699 |
2 |
14% |
|
Lufthansa |
6,344 |
3 |
6% |
|
S7 |
4,752 |
2 |
4% |
|
UT Air |
4,364 |
9 |
4% |
|
Others |
35,520 |
30% |
|
|
Total |
114,010 |
100% |
Flightbase June 14-20, 2010
Avianova, however will not be the first low cost entrant into the St Petersburg market, with Norwegian, Germanwings and Air Berlin all serving the market. Sky Express is already in the St Petersburg market as the first Russian LCC, however the carrier does not have a based presence simply serving it from its Moscow Vnukuvo base on a 3x daily basis, therefore Avianova will see an opportunity to develop a low cost strategy at St Petersburg with little competition.
Rossiya has a strong hold on the St Petersburg market and bi-lateral access is difficult for foreign based carriers as well as strong rules governing fare pricing for low cost carriers making it difficult for foreign based LCC's to establish a firm presence in the market.
Which Markets will Avianova Serve from St Petersburg?
As a point to point low cost carrier Avianova will look to serve the same destinations that it serves from Sheremetyevo. It remains to be seen whether Avianova would be granted rights to operate on the lucrative Sheremetyevo-St Petersburg route. Over 1 million passengers flew this sector between Feb 09-10, with Rossiya and Aeroflot enjoying a duopoly on the route.
Looking further afield, St Petersburg is well located geographically to serve the westbound European market and could look at its two largest unserved markets, Brussels, with over 30,000 O+D passengers who flew between Feb 09-10 primarily via either Frankfurt and Copenhagen, or Athens flown by over 14,000 passengers in the same time period with Munich and Frankfurt the most flown transit points.
IATA BSP data (Airport IS) Feb 09-10.
Related Content
