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Russian Flights Victims of Slump as Lufthansa Joins Exodus

Published on Oct 20 2015 12:02 PM in General Industry tagged: Lufthansa

Russian Flights Victims of Slump as Lufthansa Joins Exodus

Russia’s airline connections to the outside world are diminishing as an economic slowdown hurts demand and renders more and more routes unprofitable, with Lufthansa, British Airways and SAS the latest to join an exodus led by discount carrier EasyJet.

Lufthansa will cease flying to Moscow Vnukovo airport, Samara on the Volga and Nizhny Novgorod, east of the capital, with the start of its winter schedule a week from now. That leaves 63 weekly flights to Moscow Domodedovo and St. Petersburg, down from 153 to nine Russian destinations four years ago.

SAS’s schedule shows Scandinavian Airlines will halt Copenhagen-Moscow flights in March, when EasyJet also ceases its sole service from London Gatwick to the Russian capital. Air Berlin said Thursday it would end trips from Dusseldorf and Berlin to Moscow and Berlin to Kaliningrad on the Baltic, and British Airways is taking 747 jumbos off its London-Moscow route.

Foreign carriers are retreating from Russia after the economy entered recession for the first time since 2009 in the second quarter, with the ruble down almost 25 per cent against the euro in 2015 and wages declining for 11 straight months. Western sanctions imposed after the annexation of Crimea last year are also hurting trade, and stricter visa terms are hindering travel.

Ticket sales are suffering even as the collapse of Transaero Airlines, Russia’s second-biggest carrier, removes a significant chunk of capacity from the market. The company has ceased sales after Aeroflot PJSC, the local No. 1, decided against buying it, and is poised to fold completely on Dec. 15.

The Transaero exit alone is likely to increase international fares by 25 per cent as competition diminishes or ends, according to calculations by Aviasales.ru, Russia’s biggest airline search engine, which said Aeroflot stands to benefit most.

Lufthansa’s latest cuts will eliminate 15 weekly flights, or 25 per cent of the total. Its Austrian arm will also cut routes this winter, limiting services to Moscow and Krasnodar in the south after quitting St. Petersburg and Rostov-on-Don. The Swiss unit will pare frequencies from Zurich to St. Petersburg.

News by Bloomberg, edited by Hospitality Ireland

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