Pobeda traffic forecast to grow 5% in 2017

Pobeda is cutting its costs consistently to increase its profit The LCC expects to have served over 4.5 million passengers this year (Raimond Spekking / Wikimedia)

Russia’s only low-cost carrier Pobeda Airlines expects to have served more than 4.5 million passengers in 2017, CEO Andrey Kalmykov told RBC.

The carrier’s traffic will thus grow at least 5% year-on-year. Even the forecast figure is higher than the 2.3% growth demonstrated in January through August, it falls dramatically behind last year’s results, when Pobeda’s traffic grew by 38.7% year-on-year.

This slowdown is likely due to the fact that the airline was actively developing its international route network in 2016. Fewer new international destinations were introduced this year.

Kalmykov said the operator’s 2017 profit is set to exceed the management’s expectations. He did not specify the forecast figure (Pobeda’s 2016 profit stood at about 3 billion rubles, or $52 million). Kalmykov explained the higher-than-planned profit by the carrier’s continuing efforts to cut costs: “For example, we negotiate favorable handling conditions with our new destination airports. And so it goes, little by little, across the board to eventually translate into major savings.”

Speaking of Pobeda’s further plans, Kalmykov said direct connections will be introduced between about 15 Russian cities with a population of at least 1 million. To illustrate the viability of this policy, he noted that the seat load factor on the airline’s recently launcnhed route between Krasnoyarsk and Novosibirsk, both in Siberia, is close to 100%, whereas previously most of these passengers would normally use railroad transport. In his estimation, the carrier has won at least 10% of its total traffic over from the country’s monopoly railroad operator.

According to Kalmykov, the main reason why people prefer budget flights over rail is the combination of high speed and low fares. In the near future Pobeda will cut its fares by 20% thanks to the recent cancellation of the free baggage allowance.

Pobeda’s route network comprises around 40 destinations across Russia, in Europe and Asia. The carrier operates 12 Boeing 737-800 all-economy narrowbordies seating 189 passengers. Between September 2017 and August 2018, Pobeda is planning to add eight more aircraft of the same type, and could take on another 10 in 2019.

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