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At Least One Airline Reports Its Demand Grew

Madhu Unnikrishnan
September 2nd, 2020 at 1:00 PM EDT

In this time, for any airline to report traffic growth is news. But Pobeda, Aeroflot’s low-cost carrier, did in July. Traffic rose 2%, compared with the 72% decline for the mainline carrier.

This tracks with IATA’s passenger report for the month. Although international traffic remains dismal, some domestic markets are showing signs of life, particularly China and Russia. Domestic demand in Russia was down only 17% in July, compared with 73% for the U.S. Pobeda is primarily a domestic carrier, while mainline Aeroflot has a large international network.

Russians have begun traveling again, to a degree. And given travel restrictions in popular international destinations, more Russians are taking holidays at home, Aeroflot executives said during the company’s earnings call. Another factor, they said, is that there are few alternatives to air travel in a country as vast as Russia. This last factor explains why domestic markets in China, the U.S., and Brazil to cite a few examples, have been stronger, relatively, than those of smaller countries or ones with efficient alternatives to air travel.

Despite Pobeda’s relative strength, the Aeroflot Group did not escape the plague afflicting airlines worldwide. Group-wide revenues were down 52% in the second quarter. Traffic plunged 89% for the group. Besides Pobeda, another bright spot for the group was cargo, with revenues up 64% year-over-year.

Madhu Unnikrishnan
September 2nd, 2020 at 1:00 PM EDT

 

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