Aeroflot has postponed the purchase of new aircraft for three years

Aeroflot has postponed the purchase of new aircraft for three years

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The plane of airline “Aeroflot”

Photo: Reuters/Pixstream

Amid slowing growth of the air transportation “Aeroflot” has decided to defer the delivery of 21 new aircraft, scheduled 2017-2018, at a later date. It can eliminate the risk of underutilization of the courts, experts said

The largest Russian air carrier “Aeroflot” has decided to defer the delivery of 21 new aircraft in 2017-2018 2019-2021 years, follows from company presentation presented at investor Day on October 18 (RBC has a copy).

On June 30 at “Aeroflot” there were 267 aircraft, of which more than half of the average range. The company in the first half of 2016, published at the end of August, saidthat in the next two years it will purchase 63 new aircraft: 39 in 2017 and 24 in 2018. According to the new presentation, in 2016, the fleet of the carrier will increase to 273 aircraft, and in the next two years will grow by only 42 machines (up to 315), that is, one and a half times less than previously planned. And the remaining 21 aircraft will be delivered in the next three years.

The option of rescheduling (the”transfer supplies”) is reviewed, confirmed RBC a source close to “to Aeroflot”. But the details are not currently defined, he added: “we Will determine later, as you Refine your strategy and plans to expand the fleet”. A company representative declined to comment.

The postponement of new deliveries of the aircraft “Aeroflot” to remove one of the key risks of the company — if the fleet will grow faster than passenger traffic, according to a survey by Sberbank CIB and the investor. In this case, the annual average growth of the fleet slowed to 5% in the years 2016-2021, analysts of the Bank. The fact that in 2000-2014, the number of air passengers in Russia grew on average by 10.9% per year (from 26 million to 109 million), 2014 to 2016 is reduced by 10.8% (from 109 million to 96 million) and in the next ten years will grow only 3.8% per year and will reach 135 million in 2025, he expects “Aeroflot”.

However, during the meeting with investors, top managers of Aeroflot said that the company’s customer base will grow faster than the market average, indicates Sberbank CIB in the years 2016-2021 growth rate will be 7.6% per year through the development of low-cost airline “Victory” (annual average growth of 17 per cent) in 2021 the company expects to move the 61.5 million passengers.

The President “Aeroflot” Vitaly Savelyev in June an interview with RBC saidthat the business plan of “Victory”, which now has 12 aircraft in the Park needs to increase that number to 40. But “Aeroflot” intentionally holding back the development of low-cost airline, because he uses planes very intensively, he pointed out: “Their planes are flying 15 hours a day and not 12, as in “Aeroflot”. “If I put ten more cars “Victory”, one of the Aeroflot group] has really taken passenger traffic,” adds a top Manager. In a presentation to investors says that the “daughter” of the carrier by 2021 will increase its fleet to 26 vessels.

In the current economic conditions, the transfer of deliveries of new aircraft at a later date is a logical solution, says the analyst of investment company “Aton” Michael Ganelin. Aeroflot now gets the jets, which previously belonged to bankrupt company “Transaero”, primarily long-haul Boeing 747, they have a very large capacity, he recalls. Therefore, the company has the opportunity to adjust the purchase of new aircraft.

During the investor Day, the management of “Aeroflot” did not provide financial forecasts, but said that revenue will remain at current levels, while profitability will decline, according to a review of Sberbank CIB. For the first half of 2016, the company’s revenue grew by 26.8% to 223,8 billion rubles, and EBITDA increased 2.3 times-up to 30 billion rubles.