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Asia appeals to Russian passengers

CiR investigate the upturn in Russian passenger numbers, and review the outlook for 2017.

Following the downing of Malaysian flight MH17 in July 2014 and the subsequent political and economic fallout, international passenger numbers at Russian airports fell dramatically and quickly. The prior annexation of Crimea in Ukraine by Russia in March 2014 was the prelude to the decline in the county’s international passenger figures, and in August 2014, international traffic from Russia fell by -2%, the first month of decline since before 2009. 

Prior to these events, Russian international traffic had been in good health with 2013 recording a +13% increase in international traffic and in 2014 Russians were still the second highest spending nationality globally accounting for 14% of total spend. Russia’s largest airport, Moscow Sheremetyevo, had seen international traffic rise by almost +9%. Vnukovo, Moscow’s third airport, had seen international traffic double versus 2012 with flights operating to over 100 airports globally.

However, recent months have seen a return to growth for Russian International PAX. Between September and October 2016, international traffic at Russian airports saw average growth of +2.8% versus 2015, buoyed by the news that the ban on charter holiday traffic, the main transport avenue for Russians, to Turkey had been lifted following its implementation in November 2015. Russian President Vladimir Putin stated it was time “to begin the process of normalizing relations” [1]. This has been led by Charter airlines with regular flights not set to increase until the start of Q2 2017.
 

In a further boost to international passenger traffic, Russian Transport Minister, Maxim Sokolov, has recently announced that Russia may “consider the resumption of commercial flights between Moscow and Egypt” as of January 2017 [2], however Russia has not yet confirmed a date [3]. Scheduled flights from Russia to Egypt have not operated since November 2015. A key holiday destination for Russian passengers, during the traditional summer holiday months of July to September Egypt could expect to see over 110,000 Russian tourists enter the country on scheduled flights.

Asia appeals as a destination

Whilst Europe remains the most popular destination for Russian travellers, a rise in traffic to Asian destinations is evident and growth to China and Japan has grown by 21% and 18% respectively.

Looking ahead into 2017, the signs of recovery from Russia look positive with Russia’s head of Federal Air Transport Agency (FATA), Alexander Neradko, stating “Should there be no macroeconomic turmoil [next year] we hope that the 2017 results will be level with 2015.”[4]

Latest seat capacity indicators show that HY1 2017 looks set to grow by +3.2% with over 400,000 additional international seats departing Russia available. In an encouraging sign for European countries, who have seen the highest fall in Russian passengers over the past years, the first half of 2017 will see a return to growth of traffic from Russia with scheduled international seat capacities expected to rise by 2%. 

For the Turkish tourist industry, traffic from Russia is forecast to return with available scheduled seats up 23% YoY. One of its key tourist airports, Antalya, expected to see a rise of almost a third (+31%) versus 2016. This return to growth will come as a welcome boost with some industry experts stating that the Turkish economy lost up to $3bn in 2016 due to the fall in Russian traffic.[5]

Spain too can expect to see an increase in Russian visitors. Following an air services agreement signed between the two countries in 2016 [6], available seat capacities have steadily increased. Showing no signs of slowing in 2017, up 17.9% in HY1, all of Spain’s major holiday airports are expected to see significant growth in traffic from Russia.

2017 will signal the return to growth of Russian passenger traffic, as stated previously by FATA, with numbers expected to match those seen in 2015. With flights to more international destinations and the resumption of flights to the key holiday markets of Turkey & Egypt, there are many positive indicators of a revival of one of travel retail's most important nationalities.


1 https://www.bloomberg.com/news/articles/2016-06-29/putin-lifts-ban-on-russian-tourism-to-turkey-after-erdogan-talks

2 http://www.trbusiness.com/regional-news/international/russia-may-allow-resumption-of-egypt-flights-in-january/113590

3 http://www.dailynewsegypt.com/2017/01/17/610771/

4 http://www.rusaviainsider.com/russian-authorities-hope-air-travel-market-to-grow-in-2017/

5 http://www.voanews.com/a/turkey-economy-terrorism-russian-sanctions/3147900.html

6 http://www.rusaviainsider.com/russia-and-spain-expand-air-service-agreement/


PAX Source: CiR Business Lounge | Advanced Analytics Tool - Data based on Scheduled departing international passengers only. Data displayed for nationalities is based on residency through place of ticket purchase