Page 106 - RusRPTOct21

9.1.3 Aviation sector news
Total Russian traffic stood at 14mn PAX, just -3% to August 2019 (after -7% in July). Domestic traffic remained strong, +31% to the 2019 level (+29%), while the international market recovered to -48% (from -54%). The load factor was 88%, -3pp to August 2019. Aeroflot Group's traffic was 6mn PAX, -11% to August 2019 (-16% in July). Domestic traffic was +31% (+26%), and international was -62% (-69%). The load factor was 87%, -4pp to the pre-COVID level. Analysts think that the numbers are solid. Domestic traffic growth was supported by strong demand for domestic leisure destinations, while international traffic continued to benefit from the resumption in flights to Turkey. Actually, Russia led the recovery in global traffic, as China (which hadeen number one) subsided due to the reintroduction of COVID-related restrictions. Aeroflot's numbers were largely supported by Pobeda, which has seen traffic grow 47% to the 2019 level and has a load factor that is just 1pp down relative to the pre-COVID level.
Russia continues to lead the recovery of the global airline industry: in August, total traffic was just 4%elow the 2019 levels. This was muchetter than in the other regions: -23% in the US, -26% in Turkey, -41% in Europe, -63% in China. With new coronavirus waves washing over some countries, traffic recovery haseen muted. Together with the growing fuel price, this was reflected in the global airlines indexing unchanged from last month. Turkish Airlines grew a mere 1%, and Aeroflot the same 1%, with the market seemingly continuing to ignore the Russian airline industry’s superior recovery.
In Russia, traffic was -4% to the 2019 level (vs. -7% in July). The slow recovery of international routes (-50% vs.-54% in July) continues to take a little of the shine off the domestic traffic success story: +20% in August following on from the +29% in July.
Aeroflot Group carried 6mn PAX, -12% to the 2019 level (vs. -16% in July). Pobeda carried almost 50% more PAX vs. 2019 (the same as in July). Fuel prices in August were RUB 47k/t, 2% above the 2019 level.
The PAX traffic of Russian national air carrier Aeroflot was up 85% year on year to 2.7mn in August 2021, according to the preliminary data of Rosaviatsiya aviation agency cited by Sova Capital. Other subsidiary of Aeroflot Group Rossiya showed PAX traffic increase of 27% year on year to 1.3mn and low cost airline Pobeda’s PAX traffic was up 24.8% y/y to 1.5mn. As followed by bne IntelliNews, Aeroflot showed financial recovery in 2Q21 and got close breakeven. While Russian domestic air traffic has recovered, high-margin international routes still lag significantly behind. Nevertheless buy calls on Aeroflot persisted despite the continuous coronavirus (COVID-19) wave.y combining the results for Aeroflot, Rossiya and Pobeda, Sova Capital estimates that Aeroflot Group’s PAX traffic increased approximately 45% y/y to 5.5mn in August, slightly lower than the rate for the overall Russian market (+49.1% y/y to 13.9mn).
106 RUSSIA Country Report October 2021 www.intellinews.com