17 January 2008

Air Union Appoints DG; moves closer to integration

Air Union the Russian association of several airlines anchored by KrasAir has approved the appointment of Boris (no relation to Roman) Abromovich as Director General. Last May they approved the creation of the holding company that will formally integrate the alliance into a single legal entity.

The current partners also now own Malev (Hungarian Airlines) as well as its Russian component carriers: Domodedovo Airlines, KrasAir, Omskavia, Samara Airlines, Sibaviatrans.

Air Union is emerging as a strong challenger for the number 2 slot with Sibir S7 (Formerly Siberian Airlines). With the formal creation of Air Union there is clear water between the top 3 groupings and the rest of the remaining pack of Russian carriers. The three players are:

Aeroflot - Russian International (including Aeroflot Nord)
Sibir S7
Air Union.

These 3 are now the leading domestic airlines. The only other carrier of note is the independent airline TransAero who now seems to make most of its money shuttling its ancient 11 747s (200s, 300s and a single -400) between cold weather locations in Moscow and St Petersburg and warm weather locations in Egypt.

The Russian market after falling from a high of 160 Million pax at the height of the Soviet Union to below 4 million pax is now running a respectable 40 million pax a year and very strong growth.

Maturing is setting in. With the strong restrictions on the purchase of Western Airline equipment - it seems likely that these 4 players will dominate the market for some time to come.

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