Revenues of Russian online travel agencies keep falling

Russian online travel aencies have seen their revenue decrease for the second year in a row The trend is explained by a drop in air fares (Libreshot.com)

Russian online travel agencies’ revenues continue to decline despite the growing number of online air ticket sales, Alexander Sizintsev, CEO of the online aggregator Biletix, told the Online Travel 3.0 conference. According to him, the decline is partially down to the introduction in Russia of low-fare tariffs that do not cover hold baggage.

Speaking about the current market situation, Sizintsev cited the Biletix statistics: the company’s Q1 2017 air fare sales grew 8.7% year-on-year to 552,500, whereas its revenue dropped 25% to 6 billion rubles ($103 million).

The trend is particularly manifest in the international air travel segment: the average bill at Biletix dropped by 23.7% year-on-year in Q1 2017, to 9,424 rubles. By contrast, the average bill for domestic flights decreased by 9.8% to 6,409 rubles. According to Sizintsev, this can be explained by the strengthening ruble, development of route networks, and the resumption of air services to Turkey.

Sizintsev remarked that prices on the domestic market have been declining for the second consecutive year. The trend is driven by the growing market presence of LCC Pobeda Airlines, and by the introduction of hand-baggage-only fares in Russia. S7 Airlines was the first carrier to revise its pricing policy in late 2015.

According to Sizintsev, discount airlines has grown in Biletix’ overal sales. In Q1 2017 the agency sold 29,300 low-fares air tickets, or 6.2% up year-on-year; the share of such tickets in the company’s sales grew by 2.2 percentage points to 9%.

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