THE EXISTING RIGA TO MOSCOW MARKET
Air Baltic currently has a double-daily service into Sheremetyevo from the Latvian capital which it operates with B737 equipment. It competes on the route with SkyTeam member Aeroflot which operates a daily service with A319 equipment. IATA BSP data shows that Air Baltic currently has a 63% of the O+D market of over 108,000 passengers (July 2009-July 2010).
Its move into the Moscow Domodedovo market, which is slated to commence December 2nd on a thrice- weekly basis, means that it will be the only carrier serving Riga from Domodedovo. Moscow's third airport, Moscow Vnukovo is linked to Riga by regional operator UT Air, which serves Riga on a daily basis.
A RUSSIAN FOCUS
Air Baltic has a focus on growing its services into Russia, feeding traffic from east to west through its Riga hub, where the carrier is seeking to build its transit product and add to its existing Russian network. Aside from services to Moscow, Air Baltic also operates twelve-weekly services to St Petersburg and thirteen weekly flights to Kaliningrad, the Russian enclave. Air Baltic will also inaugurate new services from July 3rd, with a twice-weekly Riga to Arkhangelsk, in Northern Russia.
Air Baltic will seek to operate to more regional Russian Airports with its fleet of Q400 on order providing access to thinner markets, coupled with Riga's advantage in terms of geographical location and Air Baltic's network in Riga, the Russian regional markets will continue to be a focus.
Air Baltic currently has just a 1% share of the traffic from the Russian Federation to Western Europe, with Aeroflot leading the way with 29% of the O+D market of over 8.7 million. With just 6.7 million of these O+D passengers travelling on non-stop services that leaves plenty of leakage that Air Baltic can target to attract via its Riga hub.
CAN AIR BALTIC OPERATE BOTH MAJOR MOSCOW AIRPORTS?
In Moscow, the question will be whether Air Baltic can operate successfully to both major airports. It is a strategy that according to October Flightbase data, only Russian based Rossiya Airlines, serving the trunk routes from St Petersburg, Transaero and Orenair currently undertake. Belavia operates both markets from Minsk, the capital of Belarus, whilst Air Malta operates low frequency to both Domodedovo and Sheremetyevo.
Air Baltic is not part of any major alliance, however does have Star Alliance heritage though its former ownership by SAS. With Sheremetyevo largely a SkyTeam Airport, the expansion of carriers into Domodedovo has been driven by Star Allianceand oneworld carriers, with the likes of Lufthansa, BMI, BA and Singapore Airlines all having switched services from Sheremetyevo to Domodedovo.
The introduction of new services into Domodedovo does not mean that Air Baltic will plan to transfer services across from Sheremetyevo. What is clear, is that the fragmentation of the Moscow market is occurring much like London, with Air Baltic able to serve both markets, much like London Gatwick and London Heathrow. Each has their own distinct catchment area and characteristics. Moscow Sheremetyevo is north of Moscow, and the nearest airport to the city centre, whereas Domodedovo is 40km south of the city. Thus the decision to enter the Domodedovo service, the move appears to be largely market driven.
With the addition of the new thrice-weekly service into Domodedovo, it demonstrates the importance of the Moscow market as an importance source market for Air Baltic.
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