S7 Airlines to replace its fleet with neos and MAXs by 2024
High-flying S7 Group is planning to be the first Russian airline to completely replace its narrow-body fleet with latest-generation Airbus and Boeing aircraft. Grigory Davydov, the group’s deputy director, has revealed to Vedomosti business daily that the country’s largest private airline is planning to phase out all of its existing A320ceos and Boeing 737NGs by 2024, eventually replacing them with newest-generation A320neos and Boeing 737MAXs.
S7 Group consists of two airlines operating under S7 Airlines – Sibir, which operates Airbus A320-family and Embraer E170 regional jets, and Globus with a fleet consisting entirely of Boeing 737NGs. Of the group’s collective 91-strong fleet, 74 are narrow-bodies, including eight re-engined A320neos, an A321neo and a Boeing 737MAX-8. There are a further 32 new-generation aircraft on order – 19 А320neos, three A321neos and 10 Boeing 737MAX-8s – with deliveries scheduled before the end of 2020.
Russia’s third largest airline, which has been ordering only factory-fresh, next-gen aircraft, with the exception of mature regional Embraers, was the first in Russia to take delivery of both the A320neo and Boeing 737MAX types. Its strategy is to replace its existing fleet with those latest-generation Airbus and Boeing models that are currently available only as new units. A secondary market has not yet emerged, Davydov explains.
He also notes that the group has changed its aircraft contracting practices and now leases them for two-year periods only, which wins the airline additional flexibility in adjusting to the highly volatile local market and also protects it from excessive capacity during the market’s down cycles. It also offers access to the upgraded versions of the aircraft, such as the freshly-certified A321LR modification, which affords more range and provides 240 passenger seats compared with 230 in the base version.
The schedule of phasing out the current aircraft is designed to ensure a gradual expansion of the fleet, which is set to reach 103 aircraft by the end of 2019. That growth rate may vary depending on the market conditions, Davydov says.
The high lease payments for the new aircraft will be offset by their fuel efficiency, as fuel now amounts to nearly 30 per cent of Russian carriers’ total costs. Also, their maintenance schedules will generate less down time – and, S7 Technics, the group’s maintenance, repair and overhaul (MRO) subsidiary, already holds approvals for the re-engined narrow-bodies of both Boeing and Airbus.
As a result, the ambitious airline is hopeful to be able to push the average daily flight utilisation time of its Boeing 737MAXs to record 16 hours, 40 minutes per aircraft, from the current 737NG’s 14 hours, 10 minutes. Notably, last year, it was Russian low-cost carrier Pobeda Airlines, which managed to fly 15 to 16 hours daily, claiming the title of the world’s leader in 737NG operational intensity.
Several other airlines in the region have placed orders for re-engined narrow-bodies. Among them is Russia’s fourth largest passenger carrier Ural Airlines, which has also announced its intention to replace its entire fleet with new aircraft, and has signed up for A320neos (powered by LEAP-1A engines), A321LRs and Boeing 737MAXs.
Three more carriers have opted for the 737MAX: Utair has an order for 30, Pobeda Airlines for 20 and Nordstar for three aircraft.
Number of aircraft used by the S7 Group
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