The Russian business aviation market has been demonstrating enviable stability in recent years, and in some months even impressive growth. This was especially noticeable in the summer of 2018, when the FIFA World Cup was added to the traditionally high demand for sales. According to the European system for online booking of business aviation flights Avinode, the number of applications for arrivals from June 7, 2018 to the final day on July 15 at the Moscow Vnukovo-3 terminal increased by 111%. Charters to Koltsovo airport (Yekaterinburg) were requested 1102% more often than usual. In the business jet class, Heavy Jets ordered 187% more than in 2017. VIP-liners also experienced an unprecedented rise – for flights to the host cities of the championship, they were requested 1702% more often than usual. True, Avinode does not have data on how many requests were implemented, but there is no doubt that the interest was excitement.
Private demand
“During the 2018 World Cup, we saw an impressive interest in private aviation in general. Even those who have never flown business jets requested a price for several cities participating in the tournament at once, ”says Alisher Elmuradov, co-owner of LL Jets (charter broker). – Travel agencies and individuals were interested, however, for the most part it was idle demand. After the teams left their groups, flight cancellations and transfers to other cities began. The market coped with this successfully. “
The demand for private jet services during the championship was so great that in annual terms it can take the market to a new level. “The FIFA World Cup has certainly raised business aviation traffic to a very high level, and it will be difficult to repeat it in the coming years. According to our estimates, on an annualized basis, it can add 3.5–4.5% growth, ”says Dmitry Petrochenko, head of the Bizavnews.ru project.
The degree of congestion of terminals on the days of football matches reminded the pre-crisis ones – on the eve of 2008 and 2014. For example, in the St. Petersburg terminal of business aviation “Pulkovo-3” during the semi-final matches, an absolute record was set in terms of served flights and passengers per day. On July 11 alone, 1,338 passengers passed through the terminal; in total, in the period from July 8 to 11, the company served 593 flights and 2,718 passengers. Thus, for the first time, the St. Petersburg terminal exceeded the corresponding figure for the Moscow Vnukovo-3 over the same period. The vast majority of flights were on Long Range Jets and business airliners. At the Kazan airport, where the quarterfinals took place, the airlines operated 70 return flights to transport teams and fans, as well as more than 250 business aviation flights.
After a flurry of demand for charters in June-July 2018, the last month of summer looked less impressive, although it also brought records and not only for Russia.
According to the German consulting agency WINGX Advance, 83,230 business aviation flights were operated in Europe this month, which is 8% lower than the July peak, but 2.4% higher than August 2017 and the entire last decade. In Russia, private flights increased by 20% in August compared to the same period last year.
The upward trend of the domestic market, however, can be stopped by the pressure of geopolitical events. “In the event of tougher sanctions, 2018 may end at zero or go into a slight minus,” says Dmitry Petrochenko.
If we talk about the preferences of Russian owners of private aircraft, they continue to gravitate towards capacious long-haul aircraft, although middle categories of business jets are also appearing on the market. The owners, as a rule, are affiliated with the largest corporations of the country, therefore, on the one hand, there is practically no influx of new aircraft owners, but on the other hand, the volume of the business jet fleet is not decreasing. Thus, the fleet of business jets of Russian owners changes little in quantitative terms from year to year. According to expert estimates (official statistics still do not exist), this is from 300 to 450 aircraft. Of these, only 74 are registered in the Russian register, such data are provided by the international online resource JetNet as of April 2018.
Despite the unpopularity of the Russian register, a number of domestic airlines are successfully operating in the country. Their undoubted advantages for domestic companies are the unhindered possibility of performing domestic flights, efficiency in performing flights due to the proximity of the home airports to the location of potential customers, Russian-speaking crews, and lower cost of service at airports in comparison with foreign operators.
Foreign operators, however, are also successfully operating in the Russian market, the largest of them being Vista Jet, Global Jet Concept, Air Hamburg, Jet Story, Emperor Aviation. The key advantages of foreign airlines for the owners of business jets are a transparent history of operation and, as a result, the ability to profitably sell an aircraft on the secondary market, and extensive tools to attract financing for the purchase of a business jet. From the point of view of passengers of charter flights, this is also a high chance of “catching” an empty leg to Europe, that is, the opportunity to save on charter from 30 to 70%.
Meanwhile, companies began to fight for the passengers themselves, using social networks: total digitalization did not leave aside conservative business aviation. “Each company hopes to attract both corporate (b2b) and direct customers from the networks. In Russia, Instagram is especially popular, in Europe the picture is supplemented by LinkedIn, as well as Twitter in England, ”says Yuri Dzun, Business Development Partner at the international company Aviapages. Many UK brokers have created pages on their FIFA World Cup websites to attract potential customers. Yuri Dzun believes that the growth in the intensity of data exchange will lead to a variety of business models in the market and the standardization of digital processes.
