Aeroflot Plans To Reduce Fleet Size
Aeroflot sees the Russian aviation industry crisis deepening and is renegotiating its aircraft order with Boeing as the carrier seeks to reduce its fleet, chief executive Vitaly Savelyev said.
Aeroflot signed a contract for 22 787 Dreamliners in 2007 with delivery scheduled for 2014, but Boeing later pushed the supply date to 2016.
“In today’s falling market we have well-founded reasons to cancel the contract,” Savelyev told Reuters news agency. “We don’t see a market where it is possible to use this aircraft. We haven’t yet seen the worst of this crisis.”
Russia’s flagging economy, battling against Western sanctions for the Ukraine crisis and a collapse in global oil prices, has hit airlines hard and unprofitable domestic traffic has grown at the expense of international flights as consumers reign in spending.
Savelyev said Aeroflot was in the final stages of negotiations with Boeing and the two companies were discussing all options, including cancelling the contract.
UNPREDICTABLE MARKET
The Russian aviation industry lost around RUB30 billion roubles (USD$553.5 million) last year, according to the Russian Association of Air Transport Operators. That compared with a RUB4.7 billion loss in 2013.
Aeroflot has increased passenger numbers by more than 15 percent in the last five months, but the total number of passengers for Russian airlines has fallen by 3 percent in the same period, Savelyev said.
“The global market is on the rise but in Russia, because of the recession, many passengers are refusing to fly,” he said.
Faced with the expense of maintaining a large number of aircraft, Aeroflot and other airlines are looking at reducing fleet size as market demand falls.
Savelyev said Aeroflot was planning to trade out its older aircraft and the 787 contract with Boeing was not the only supply deal being renegotiated. The airline said on Thursday it had started preparations to sell more that 40 of the 161 aircraft it currently operates.
“We are speaking with all our suppliers… to some how to postpone delivery,” Savelyev said. “The market is unpredictable. No one knows what will happen next.”
(Reuters)