Red Wings gets authorisation to fly from St. Petersburg to Brussels three times a week from Summer 2019

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The airline Red Wings (owned by lessor “Ilyushin Finance Co.”, IFC) received Rosaviatsia’s authorisation to fly between Brussels and St. Petersburg. Direct flights from Pulkovo to the Belgian capital are now carried out only by foreign airlines: Brussels Airlines (non-stop) at an average ticket price of 25,000 rubles, KLM (via Amsterdam) at 20,300 rubles and airBaltic (via Riga) at 16,300 rubles. However, the Russian airline will only be ready to start this route by the summer of 2019, when six mid-range Bombardier CS300 aircraft (now called Airbus A220-300) join the carrier’s fleet. These aeroplanes are more economical to operate and will allow Red Wings to compete in price on the route.

Red Wings Airlines (a 100% subsidiary of Red Wings, owned by the leasing company IFC) has received authorisation for flights to Brussels from St. Petersburg, according to information published on the website of the Federal Air Transport Administration (Rosaviatsia). The carrier requested flights from Pulkovo to the Belgian capital three times a week. Red Wings explained to newspaper Kommersant that obtaining the authorisation to fly the route was linked to the acquisition of the medium-range Bombardier CS300 aircraft (now Airbus A220-300) in 2019. The airline expects the delivery of six Bombardier CS300 aircraft, which will enter the fleet starting in May 2019. The airline currently operates five Tu-204s, eight A321s and four A320s. The CS300 is characterised by a high fuel efficiency (up to 20% savings per seat compared to similar aircraft), which will allow Red Wings airlines to compete on price on this route. The CS300 aircraft will be delivered with a single-class economy configuration of 145 seats.

Earlier, the adviser to the company’s CEO Nikolai Dadonov told ATO.ru that the CS300 aircraft does not compete with either the Sukhoi Superjet 100 or the promising MS-21. The aircraft will be delivered to the Red Wings fleet but will be used within the joint route network with partner Nordavia. Nordavia and Red Wings have been working for more than a year as part of an alliance with a common route network and a ticket sales network, and in late 2017 announced the creation of a single company management.

The current shareholder of the airline, Sergey Kuznetsov, bought Nordavia in 2016 from Norilsk Nickel. IFC (Mr. Kuznetsov) bought Red Wings in 2016 from Sky Invest, with the conversion of part of the debt into equity. Nordavia’s net profit in 2016 under Russian accounting rules is 1.7 billion rubles on revenues of 6.4 billion rubles, Red Wings’s loss is 193 million rubles on revenues of 6.1 billion rubles.

Red Wings already flies from Pulkovo to Moscow, Krasnodar, Sochi, Kaliningrad, Simferopol and Tivat (scheduled flights), as well as under a charter programme to Antalya, Dalaman, Burgas, Naples, Varna, Rimini and Enfidha. Between Belgium and St. Petersburg there is traditionally a high passenger traffic, says VVSS, the Pulkovo airport operator. This is both a tourist and business traffic. Brussels Airlines carries out summer flights from Pulkovo, and during the winter holidays, they put additional flights, increasing their number each year. Aviasales says that the most popular months for the citizens of St. Petersburg in Brussels are April and October. Only Brussels Airlines operates direct flights from Pulkovo (the average ticket price is 25,000 rubles), but it’s cheaper to fly with a transfer in Amsterdam by KLM (average 20,300 rubles). The Dutch carrier over the past year had 42% of all bookings, in second place airBaltic (average ticket price 16,300 rubles) with a share of 11.5%, followed by Brussels Airlines with only 8 %.

Hence we can conclude that Red Wings will be able to compete with Brussels Airlines if it offers tickets with an average price of less than 25 thousand rubles, says Aviasales.

Source: Jana Wojciechowska in Kommersant.ru

11/07/2018

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