Irish budget carrier Ryanair is understood to be pushing hard to launch low-cost services into and even within the Russian market and according to reports, Irish aviation authorities have now contacted their counterparts in Russia to seek formal permission for new direct air links between the two countries to support Ryanair’s ambitions. This news follows Ryanair’s attendance at our Routes CIS forum in Ekaterinburg, Russia in June this year, where it held meetings with local airports and senior transport ministry officials.
It is certainly true to say that the low-cost market has failed to take-off across Russia. The demographics and buying patterns of the local market, together with operational and licencing restrictions has meant that operatos such as Avianova and Sky Express have had little success. Although some budget operators such as Air Arabia, airberlin, flydubai, Niki, Pegasus Airlines and Vueling do serve major and regional points across Russia, traffic restrictions make it difficult for them to compete on the most popular routes.
To overcome this local void, the Russian Transport Ministry is looking at the option of permitting foreign low-cost operators, like Ryanair, to fly domestic flights within Russia. This was confirmed by the head of Federal Anti-Monopoly Service, Igor Artemyev, only last week, according to the local Interfax news agency. In a statement he is reported to have said: "We are very actively discussing the issue of inviting foreign low-cost airlines ... including for domestic transportation. We expect to hold a serious discussion on this."
The ambition of the Russian transport authorities is clear and according to Vedomosti has already received backing from the most senior of politicians in the country. The publication quotes a spokesman for First Deputy Prime Minister Igor Shuvalov as saying “we are talking about allowing low-cost airlines to fly to some destinations where their technology, investment and experience of managing this business could increase competition and, of course, lower costs”.
Ryanair has confirmed it has held “exploratory” talks with Russian airports, some of which would have taken place at Routes CIS earlier this year, but it is unclear if the Irish carrier’s business model would be sustainable in the Russian market, where many passengers still prefer to make major purchases by cash rather than online.
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