Page 98 - RusRPTJun20

9.1.3​ Aviation sector news
Aviation social distancing rules introduced, middle seats empty
• The Russian sanitary agency, Rospotrebnadzor, has asked Russian airlines to leave 50% of seats unoccupied, in epidemiological recommendations published on May 19..
• Other measures include disinfection of aircraft, and providing passengers with masks, gloves and antiseptics.
• Analysts believe that the 50% seats restriction is unlikely to affect airlines in the next month. Carriers are presently flying with load factors below 30%.
• There are different views on the effect of the measures once demand restores. The Ministry of Transport believes they would increase average ticket prices to RUB70k vs. the 2019 average of RUB10k. The IATA suggested a 43-54% rise in the average ticket if the middle seat were kept empty.
• Analysts calculate that if airlines could have a 65% PLF, but had to keep 50%, they could raise airfares by 30%.
• 30% lower costs due to lower fuel prices and leasing payments would offset this growth, in our view, so airfares would not exceed the level of 2019, but leaving airlines with no demand stimulation.
• The restrictions are expected to be short lived.
• Russia is at an advanced stage of vaccine development, and the President has been informed of a September target date to have one registered.
98​ RUSSIA Country Report​ June 2020 ​ ​www.intellinews.com