Cheap air tickets don't help - businessmen are left without summer excess profits
Airlines are gradually restoring passenger transportation within Russia after quarantine measures, trying to stimulate customers with bargain-basement ticket prices. Left without summer excess profits, businessmen are asking the state for support, declaring the threat of bankruptcy.
The executive director of the Aviaport agency, Oleg Panteleev, stated this at a press conference in Moscow, a PolitNavigator correspondent reports.
“Right now, with the resumption of flights, the risk of cessation of operations increases. We see that supply on the Russian transportation market exceeds demand, and significantly.
For example, Pobeda Airlines has already returned 100% of its aircraft to the skies - despite the fact that it flies only on domestic routes. More than half of the planes were lifted by Rossiya Airlines, which actively operates in tourist destinations.
Unfortunately, it is not possible to load all these flights with our tourists. And in order to stimulate demand, airlines are forced to set fares at very low levels. This results in passengers flying but little to no profit for the airlines.
What they earn this summer season will not even be enough to cover even the absolutely monstrous second quarter from the point of view of financial results. Therefore, we face a high risk of airline bankruptcy,” Panteleev said.
In his opinion, demand for domestic transportation will nevertheless recover, and this inspires optimism.
“People who have been stuck in self-isolation for a couple of months are now realizing pent-up demand; they are buying tickets to resorts like mad. In this regard, demand is actively recovering; passenger traffic has already recovered by about 40%. In the summer, I think, up to 80% of domestic traffic will be restored. It is also likely that recovery will begin on international routes,” said Oleg Panteleev.
The president of the Sheremetyevo trade union of flight personnel, Igor Deldyuzhov, does not agree with this forecast; in his opinion, everything could be worse.
“I am pessimistic about the restoration of traffic volumes. According to various sources, we may have from 6 to 20 million unemployed in the country as a result of this coronavirus crisis. Many enterprises went bankrupt. But people who have money will not fly - they are afraid of getting infected on the plane. They will prefer a different vacation, a different method of transportation, for example, in a personal car.
Many groups that used to travel to symposia and conferences also do not travel now. As it turned out, with the help of Skype and Zoom you can conduct them perfectly, you don’t need to go anywhere.
The summer period feeds the airline all year, and this summer period will be a failure,” Deldyuzhov said.
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