UTair reveals fleet renewal plans

After a radical capacity reduction as a means to save the airline from bankruptcy, UTair is considering new aircraft once again After a radical capacity reduction as a means to save the airline from bankruptcy, UTair is considering new aircraft once again (Photo by Leonid Faerberg / transport-photo.com)

UTair, Russia’s fourth largest carrier, will launch a feet renewal program somewhere around the end of 2018 or the beginning of 2019, the airline’s CEO, Andrey Martirosov, told Finmarket news agency.

According to Martirosov, the carrier is expected to receive more than 10 aircraft, provided the airline’s operational and financial situation develops steadily and according to the plan. UTair’s CEO did not specify the types of aircraft in question. However, in October of 2014, when the airline’s daunting financial situation forced it to suspend delivery plans of the new Airbus A321s and Boeing 737NGs it had on order, Martirosov mentioned that the aircraft should join the fleet sometime in 2016-2018.

According to data from Airbus as of July 31, eight out of 20 A321s ordered by UTair are set for delivery. The Boeing database from the same date, shows that UTair’s unfulfilled orders include five Boeing 737-900ERs and 25 Boeing 737-800s.

According to the Federal Air Transport Agency’s register, UTair’s fleet currently consists of 62 aircraft: six Boeing 737-400s, 31 Boeing 737-500s, nine Boeing 737-800s, three wide-body Boeing 767-200s and 13 regional ATR 72-200s. This ends up being half the number of aircraft found in the carrier’s fleet in the fall of 2014, when the carrier found itself on the brink of bankruptcy and started a fleet reduction program.

The program,  according to Martirosov, was meant to save the airline at least $100 million in leasing payments. As a result, the number of aircraft in the airline’s fleet went from 115 to 62 aircraft. The airline at that time completely abandoned all of its 12 Airbus A321s and its Boeing 757s, at the same time phasing out six out of its 15 Boeing 737-800s and three of its nine Boeing 767 aircraft.

The abandoning of these aircraft was one of the recovery methods utilized by UTair. State support also helped save the airline, which received state guarantees to the tune of 9.464 billion rubles ($148.062 million), a move that allowed UTair to refinance its debt.

The airline’s main target at this point is to increase efficiency. While in 2014, the UTair group registered a loss of 61.659 billion rubles ($964.634 million), according to Russian accounting standards, in 2015 the airline made a profit of 2.274 billion rubles ($35.576 million).

In 2016, the airline began to increase its passenger traffic, after having lost a significant amount of passenger capacity due to the restructuring, which saw a decrease from 16,000 to 8,000 seats. For the first six months of this year, the airline increased passenger traffic by 14%, to 2.824 million passengers.

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