Page 133 - RusRPTMay21

not see major downsides for the company, even if the closure were to last during the high summer season in July-September (which we think is unlikely).
The traffic recovery continued in March. Russia posted a 28% decline to March 2019 (vs. -33% a month ago). We also note that the 14% MoM growth in fuel was compensated by the 5% MoM growth in yields in Russia. While Chinese traffic slammed on the brakes for the New Year holiday, we believe that it could catch up and stand on par with Russia (the China March data has not been released yet). In Turkey, traffic was 54% lower than in 2019 (vs. -61% in February). In Europe, it was down 73% (vs. -74%), and in the US it was down 48% (vs. -54%). In our view, the recovery is going to accelerate as the low season ends, so we might see the April dynamics being even more bullish. In Russia, total traffic was 6mn PAX, -28% to March 2019 (an improvement on the 33% decline in February). We think that the domestic market has fully recovered since then and exceeded the 2019 level by 7%, while international traffic was broadly unchanged, -80%. Aeroflot Group (excl. Aurora) carried 3mn PAX, -38% to March 2019 (vs. -42% in February): Aeroflot Airlines was down 59% and Rossiya was down 22%, but Pobeda was up 35% (+20% to the last pre-pandemic month, February 2020). Other industry metrics were as follows last month: fuel prices were RUB 41k/t, +7% YoY (+14% MoM), and the average yield was up 9% YoY (+5% MoM). As the fuel cost is some 30% of passenger revenues, we think that this yields growth compensated for rising costs.
9.1.4 Construction & Real estate sector news
In the first three months of 2021, 17.8mn square meters of residential housing were commissioned in Russia, according to published by Rosstat on April 20. This is 15% more than in the same period last year, Russian Deputy Prime Minister Marat Khusnullin told reporters. In total, in the first quarter of 2021, 1.7 thousand apartment buildings were built and 72.2 thousand residential buildings were built by the population. Of these, in March 2021, 622 apartment buildings and 27.7 thousand individual housing construction projects were commissioned - a total of 6.6mn square meters. m of living space. The growth in the rate of housing commissioning in March 2021 in relation to the March indicator of last year amounted to almost 20%.
Russian government concerned by rising house prices. After berating the government into regulating rising food prices, Putin is turning his attention to real estate. During a meeting with the government on April 9, Russian President Vladimir Putin emphasized that Russia is experiencing a “significant rise” in house prices.
Putin noted that prices have risen 12% on average, but some regions are experiencing far worse growth. In North Ossetia, for instance, housing costs have shot up 30%, in Oryol they’ve risen 19.7%, in Adygea 19.3%, Amur
133 RUSSIA Country Report May 2021 www.intellinews.com