The Russian tourist charter airline IFly is planning to add new aircraft types to its fleet in 2016 in the light of the restrictions on flights to Egypt and Turkey introduced by the Russian authorities, the withering demand for the carrier’s other leisure destinations, and the standing plans of the travel agency Tez Tour, I-Fly’s largest customer, to develop domestic tourism in Russia.
“We are restructuring our fleet, and our primary target is to do away with all our Boeing 757-200s by 2017,” says IFly Deputy CEO Ivan Butrin. “The type is no longer in production, and the maintenance costs continue to grow. There are alternatives available from the market. In light of this, and of the current market situation, we have decided to phase out our Boeing 757-200s in 2016.”
IFly started out six years ago with a fleet of five 221-seat, all-economy Boeing 757-200s. This year, the airline stopped operating three airliners, all built in 1999. The carrier continues with the two airframes manufactured in 1999 and 2001, registered EI-DUC (I-Fly’s first airplane to haveundergone a D-Check in Russia, at a Sibir Technics facility) and EI-EWT, respectively.
“We aim to slightly decrease our capacity while staying in the curent price bracket, because our partners are very strict about seat prices on certain routes,” Butrin says. “Our strategy is also about embracing the most efficient operations possible. This is why our aim is to get mid-aged aircraft (aged 10 to 12 years) with clear-cut operating costs. We will choose between 189-seat Boeing 737-800s and 156-seat Airbus A319s.” According to Butrin, IFly might also go for Boeing 737 Classics, which Tez Tour asks for on a number of domestic city pairs in Russia.
Tez Tour’s area of interest that generates nearly half of I-Fly’s passenger numbers has the Black Sea resorts of Russia’s Krasnodar Region at its heart. At least 20% of the travel operator’s clients who used to spend their vacations in Turkey say they will choose the Krasnodar resorts now. On the other hand, the Tez Tour press service says, the company will continue to actively promote Greece, Bulgaria, Spain, UAE, Cyprus,and other foreign destinations.
“Every Russian region has its own [tourist] potential,” says Tez Tour board chairman Alexander Sinigibsky. “We are now observing an increasedinterest in domestic travel, which is being supported and promoted by government agencies. This situation might stay with us for decades. This is also an important infrastructural project, the government is already supporting us and we hope this support will continue into the future.”
In addition to its Boeing 757-200s, IFly continues to operate two 387-seat Airbus A330-300 widebodies (EI-FBU and EI-ETI, built in 1996-97). The airline is not planning to retire these just yet. “The A330 is the most efficient model at present in terms of the seat-kilometer cost; there arenot that many operators who would be prepared to phase it out,” Butrin says. “These aircraft are in such demand it is next to impossible to get a [pre-owned] one. We have been in active search of one or two additional A330-300s for our fleet over the past two years, but the demandobviously beats the supply. The new replacement for this model, the A350, is not going to reach operational efficiency in Russia until seven to 10 years from now, after the lease price has gone down.”
So IFly is planning to lay its hands on four-engined Airbus A340s (the type was certified by the CIS-wide Interstate Aviation Committee’s Aircraft Registry in June 2015). “With the jet fuel prices falling, the Airbus A340 becomes a good option for our market,” Butrin notes. “It is true that this model’s fuel consumption is higher than that of the A330, but the comparable lease terms, maintenance requirements, and operating costs balance it out.”
Butrin says IFly has been very careful about its fleet development strategy since the early days: “We understood we would not be able to guarantee continuous growth. This is why we avoided the type of situation in which our competition has found itself, being forced to reduce the carrying capacity significantly. The market has seen a dramatic decrease in demand for major international long-haul routes. Experts put the overall drop at 40%, but if you look at the actual decrease in [passenger numbers] from central Russia to the Dominican Republic and Thailand, it is around 60%. We foresaw that, this is why we did not expand our fleet even while under more favorable conditions.”
IFly carried 567,268 passengers in January-October 2015 what was an almost 39% drop compared to the same period of 2014.
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