New brand and fleet reinvention takes off for Russia’s Nordavia

Nordavia The Russian regional airline is considering replacing its fleet with Boeing 737MAX aircraft (ATO.ru)

Russia’s Nordavia – Regional Airlines which, according to its 2018 operating results, ranks 16th in the list of the country’s passenger carriers, has announced that plans are on track to radically overhaul its branding, whilst also extending its fleet.

Sergey Savostin, who was appointed general director of the private airline last November, has exclusively revealed to Russian Aviation Insider that Nordavia is to take delivery of six aircraft: five Boeing 737-800s and a single B737-700.

As a result of this expansion, the company expects to double its traffic levels from last year. The airline is currently in the process of gradually reducing the number of vintage Boeing 737-500s it operates and is likely to have moved them out altogether in 2020.

New branding

Nordavia, which is located in the north-western city of Arkhangelsk, carried 1.19 million passengers in 2018, a 9.4 per cent improvement on the previous year. The airline’s passenger target for this year is a challenging 83 per cent improvement to 2.2 million.

Savostin admits the company has a string of ambitious tasks lined up for 2019. “This will require the ultimate in concentration and resources – human, financial and organisational,” he says. “We will also take delivery of six aircraft and staff them with flight and cabin crews – resources are in high demand these days,” the director general explains.

“At the same time, we will be re-branding the airline as Smartavia. It’s not just a change of name. We are also implementing the newest and smartest technologies into the airline’s daily operations to offer our customers individual attention and access to services which will be unique to the Russian air travel market,” Savostin reveals.

He points out that Smartavia will offer an extended range of services utilising new technologies, such as state-of-the-art an in-flight entertainment systems. “To create this unique [to Russia] service, we have employed the advanced technologies associated with the entire operational cycle of an airline, from distribution and customer communications, to fitting aircraft with IEF systems, and beyond,” Savostin adds. “We will try to make the airline customer-friendly. [However] let us not go into too much detail now, but wait for the new brand presentation this spring.”

Fleet renewal

Despite its plans for introducing six Boeing 737NGs, the airline is continuing to operate its ageing classic B737s series. Last year, it retired just one of these aircraft, whilst adding a couple of B737-700s – the first aircraft additions in nine years. The remaining B737-500s will be engaged in the 2019 schedule and possibly into 2020 as well, but they will not be re-painted in the new Smart Avia livery, Savostin confirms.

The director general also reveals that if all of the airline’s ambitious plans materialise, it may also consider adding the Boeing 737MAX aircraft.

The economic efficiency

Nordavia’s 2018 revenues of eight billion roubles (US$123 million) is a 15 per cent improvement on the previous year. Operational profits reached 78 million roubles, up 27 per cent on 2017. Another positive indicator was the nine per cent improvement of the workforce’s productivity-per-revenue status, which achieved 13.6 million roubles per employee.

Savostin points to rocketing jet fuel prices and the weakening rouble which, on average, lost eight per cent to the US dollar last year, as being among the negative factors which have been affecting the industry and the airline’s business.

He is confident, though, of Nordavia’s economic efficiency. “The airline today is profitable and efficient. But in 2018, the net profit was virtually devoured by the 30 per cent fuel costs increase and the growth of airport fees, which reached 16 to 17 per cent on almost all destinations. We also had to increase pilot wages. The jet fuel price spikes just blasted the revenues. We barely managed to stay in black,” Savostin reflects.

Headquartered at Arkhangelsk, Nordavia also bases aircraft at St Petersburg and Moscow. In 2018, it operated more than 50 routes in a network linking Russia’s northwest region with central and southern regions. The international segment of the airline’s business remains relatively small.

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