Page 103 - RusRPTJul19

ASK (available seat kilometres) rose 12.6%. Passenger load factor (PLF) was 77%, with 74.8% on international routes and 80.3% on domestic.
Russian national air carrier Aeroflot hedged 70% of its fuel costs for 2019, the head of the airline Vitaly Savelyev told the shareholders on June 25, as cited by Reuters. "We had a feeling jet fuel can have an unpredictable market dynamic again," Savelyev said. Last time Aeroflot hedged the fuel costs was in 2015, and the hedge was unprofitable as the price went down abruptly at the end of the year. In 2018 the whole commercial aviation market suffered a loss of about RUB100bn on high fuel prices, Savelyev estimated.
Sukhoi Civil Aircrafts that produces Sukhoi Superjet 100 medium-range Russian passenger carrier is valued at RUB44.8bn ($688mn), Vedomosti daily reported on May 4 citing sources close to the state United Aircraft Corporation (OAK or UAC) which is the mother holding of Sukhoi and other aircraft building assets. A regional SSJ-100 airliner operated by Russian flag carrier Aeroflot crashed at Moscow Sheremetyevo airport on May 5 shortly after taking off for a regular flight to Murmansk. Out of 78 people on board, 41 people reportedly did not survive the crash. Reportedly, Sukhoi and all of the civil aircraft assets of UAC could now be merged in a single company, worth about RUB100bn. This would include Irkut (valued at RUB56.8bn), which designed a medium-range jet MS-21 planned to be launched in 2021. After the creation of the united company, UAC plans to sell the controlling stake to Russian state banks Sberbank, VTB, and VEB (Vnesheconombank), while hoping to attract private investors in the future. In the meantime the largest user of SSJ-100 Russian national carrier Aeroflot has cut the number of flights on the jet in the two weeks following the tragic crash, Reuters reported on June 3 after analysing Flightradar24 data. Numerous reports of delayed and cancelled SSJ-100 flights threw a shade on Aeroflot's recently announced ambitious growth strategy, which relies on deeper regional penetration with medium-range jets. Industry sources told Reuters that Sukhoi aircraft are under increased scrutiny, while some flight cancellations were provoked by fears and suspicions of the passengers. Reuters reminds that 213,000 people signed a petition demanding to keep all SSJ-100s on the ground during the investigation of the crash, while Russian internet major Yandex recommended its employers to avoid flying the jet.
Troubled Russian carrier UTair warned its creditors that it will not be able to fully repay the interest on loans worth RUB109.2bn ($1.7bn), Vedomosti daily reported on June 18. Previously in April unconfirmed reports claimed that UTair is seeking to postpone its bond repayment by 35 years, in addition to previous attempts to restructure RUB31.4bn ($488mn) worth of banking loans.
9.2.4 Construction & Real estate corporate news
Russia's development bank VEB.RF (Vneshekonombank) and StroyProyektHolding of sanctioned stoligarch Arcady Rotenberg will set up a joint venture and a major player on the infrastructure and construction, the bank said after signing a memorandum of understanding at the Saint Petersburg International Economic Forum (SPIEF). Rotenberg, one of the businessmen who form president Vladimir Putin’s inner circle, has controlled the largest state procurement and building projects. StroyProyektHolding, together with Mostotrest acquired by Rotenberg in April 2018, has been the main contractor on the $4bn construction of a controversial bridge across the
103 RUSSIA Country Report July 2019 www.intellinews.com