2021 was the second year into COVID-19 pandemic. Airline industry globally was still depressed as the aftermath of the hit it took from the pandemic, which outweighed all previous crises in terms of both operational and financial performance. Plunge of passenger traffic to the levels of early 2000-s forced airlines to unleash unprecedented bailout programmes, whilst national regulators offered support both directly through a variety of financing incentives as well as indirectly.
Under these conditions (and up until the moment the economic sanctions against Russian air transport were imposed), Aeroflot Group demonstrated steady growth. The role of Russia’s flag carrier and it sister airlines (Rossiya and LCC Pobeda) on the global marketplace was acknowledged by the new rating from an influential international aviation analytics firm.
Britain’s Cirium, one of the world’s leading data and analysis agencies for the airline industry has published in September its 2021 global rating of passenger airlines, the World Airline Passenger Ranking for 2021.
According to the ranking, which is based on over 600 operators tracked, Aeroflot Group as a whole, and all of its airline subsidiaries significantly improved their positions in the rank. The Group made it to the world’s TOP-10, and the airlines were all in the Top 40: Aeroflot – 16th (four places up from 2019), Rossiya – 37th (up 30 places), and Pobeda – 38th, soaring 62 places up.
The report notes, that throughout 2021 mainline carriers, especially those relying on business travel and long-haul flying, were struggling most. Their share of world passenger traffic had slipped five percentage points to 64 per cent. That decline was largely picked up by low-cost carriers, who raised their share to 26%.
WORLD’S TOP-100 AIRLINES RANKING BY PASSENGER TRAFFIC
In 2021 passenger traffic on scheduled flights reached 2.3 billion passengers, up 26 per cent from 1.8 billion in 2020, but still nearly half of the 4.5 billion in the pre-pandemic 2019.
According to Cirium ranking, the major US carriers made a sweep of the top four places. American Airlines stays on top of the ranking again in 2021, followed by Delta Air Lines, United Airlines and Southwest Airlines, demonstrating the strength of the recovery that continues to take place in the US domestic market.
Overall, airlines in North America showed 75 per cent growth from the low point in 2020, although still ending last year down by 40 per cent on 2019 traffic levels, as measured in Revenue Passenger Kilometres/Miles (RPKs/RPMs).
The big three carriers in mainland China – China Southern, China Eastern and Air China – held their place toward the top of the ranking.
Across Asia Pacific as a whole, airlines saw traffic fall again last year. Cathay Pacific slipped spectacularly, falling out of the top 100 ranking entirely following Hong-Kong’s pursuit of an aggressive zero-Covid strategy. It was not alone. Carriers across the region in Indonesia, Malaysia, South Korea and Thailand also continued to shrink.
In Japan, All Nippon Airways and Japan Airlines had lost nearly 85 per cent of their traffic in 2020 and were still down by around 75per cent by the end of 2021. Both fell steeply down the rankings as a result.
Two Gulf carriers, Emirates Airline and Qatar Airways, both retained their position within the top 10 airlines, although the gap between them narrowed. Emirates slipped four places to sit just ahead of a rising Qatar Airways, which has made a point of maintaining as much of its network as possible.
Turkish Airlines, helped by an extensive domestic market free of cross-border travel restrictions, climbed four places to 10th in the latest ranking compared with 2019.
Low-cost carriers continued to rise up the rankings across the regions. Ryanair cemented its place as Europe’s largest carrier, sitting in fifth place just below Southwest, and was the only European airline to make it into the top ten.
Europe’s major network carriers have fared less well over the past couple of years, as demand for long-haul, premium travel remained depressed. Although Air France held steady at 13th place, Lufthansa slipped down the rankings and British Airways fell out of the top 20 altogether. Virgin Atlantic also dropped more than 50 places as it too suffered from the slow return of long-haul and premium traffic.
Against this background, success of Aeroflot Group, the largest airline grouping in Russia, is obvious. The country’s national carrier, positioned as premium-segment airline, Aeroflot occupied 16thplace in the ranking, up from the 20th in 2019, having outperformed such giants as Lufthansa, KLM, British Airways, Air Canada and Iberia.
The medium-segment Rossiya Airlines went up to 37th place from 67th in 2019. But low-cost carrier Pobeda was the one with maximum climb –38th from 100th in 2019.
As a result, Aeroflot as a group entered the TOP-10 of the world’s 50 largest airline groups by RPKs. In 2019 the Russian group was on 14th position in the ranking.
EFICIENT MANAGEMENT AND HARD WORK
Aeroflot achieved such impressive results through adapting to the new reality, efficient work during pandemic restrictions and identifying new growth opportunities. In 2021 Aeroflot Group focused on domestic growth strategy, having significantly increased its presence on the Russian market. It launched new routes across Russia and increased frequencies of the most popular domestic flights. For the first time in its modern history the group launched a programme of direct flights from Russian regions to resort destinations in the south of the country, instead of connecting them through its Moscow hub. Launching a second hub in Krasnoyarsk, the heart of Siberia, became a milestone in 2021. Both domestic and international flights from Krasnoyarsk allow passengers to save time and money on transcontinental travel. The number of such direct routes has been steadily increasing. Domestic segment contributed 81.5 per cent to the total traffic in 2021.
It was the new development vector, which spurred the growth – in 2021 Aeroflot Group demonstrated steady recovery of both operational and financial performance. Total traffic went up 56 per cent compared to 2020 numbers, reaching 45.8 million passengers. Thus, the group recovered 77.6 per cent of its pre-pandemic traffic, which is well above the global average. What’s more, 2021 domestic passenger traffic – 37.7 million – exceeded both 2020 (by 59.2 per cent) and even the pre-pandemic 2019 (by 15.3 per cent).
International travel through 2021 remained heavily restricted. On average, international demand recovered to 31.8 per cent of 2019 level, but by the end of the year (in Q4) it improved to 50.1 per cent. As a result, the airline served 8.5 million international passengers, up 43.4 per cent year-on-year.
APKs in domestic segment was 69.5 per cent of total capacities (up 38.1 per cent, to 124.6 billion). This was different from the pre-pandemic structure – in 2019 domestic capacities (40.4 per cent of total) served 55.3 per cent of total traffic. RPKs improved 49.6 per cent year-on-year to 100.1 billion. The seat load factor improved 6.2 percentage points to 80.3 per cent.
Despite a grave situation throughout the industry, Aeroflot did not compromise its previous achievements and maintained high level of punctuality for its passengers. In 2021 Aeroflot was one of the world’s three most punctual carriers and the most punctual legacy carrier in Europe. According to Cirium, 91.05 per cent of Aeroflot’s flights were performed on schedule.
Aeroflot Group’s low-cost division Pobeda proved a success story – it carried 14.4 million passengers in 2021, up 58.8 per cent on the previous year, including 13.6 million domestic and 0.8 million international travelers. The airline performed 81,700 flights, its RPKs improved 55.5 per cent year-on-year reaching 24.1 billion. Seat load factor was healthy 93.6 per cent.
The airline restored its traffic numbers to 2019 levels already in July 2020, and throughout 2021 its average monthly growth rate exceeded 30 per cent, reaching 53.8 per cent in June. Such high growth rate was the result of increasing demand for low-cost product.
Pobeda once again confirmed its global leadership status in Boeing 737-800 aircraft utilization rates, as reported by the OEM, at around 12 hours per day. Such high flight intensity allowed the airline to offer lower fares to its customers.
In 2021 Aeroflot Group decreased its net loss by 200 per cent. In Q3 the group generated net profits (11.6 billion roubles). Passenger revenue in 2021 improved by 73.5 per cent year-on-year, whilst EBITDA improved 4.3 times, EBITDA profitability came close to pre-pandemic levels.
In 2021 Aeroflot Group has achieved significant progress in one of its strategic goals – making air travel more affordable by reducing the cost of domestic economy class fare. It introduced new flexible pricing model and optimized fleet utilization by redistributing domestic destinations among its subsidiaries. The support provided by the state in the form of subsidies which help improve access to the country’s remote regions, has played an important role.
Aeroflot continues with its mission of serving Russia’s transport integrity providing its citizens with convenient, safe and fast travel.
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