Aeroflot looking to expand as Airbus 330 goes through paces

Aeroflot has taken delivery of its first Airbus 330 airliner, with nine more to come by 2010. With new aircraft on the way, and potential for mergers ahead, Russia's biggest airline looks set to ride out a turbulent year for air transport.

Named after Russian conductor Evgeny Svetlanov, Aeroflot 's first new long-haul Airbus A330 will carry passengers to Asian destinations.  Aeroflot is now testing the plane on domestic routes. Starting from January, the aircraft will replace a Boeing 767 on flights to Tokyo and Shanghai.

Cost management is crucial for Russian airlines as passenger volumes are expected to fall by at least 10% next year.  Several Russian airlines have already gone bankrupt this year. Aeroflot's CEO, Valery Okulov, says the airline will benefit from the situation.

“Next year we expect to keep the current level of passengers or even increase it a bit. We'll be able to take the share of those airlines that are going out of business now. So we hope for a 3 to 4 percent growth in passengers.”

Aeroflot also wants to expand through mergers. It is eyeing troubled airline Sibir, in which the government holds a 25 percent stake, according to Evgeny Shago, Chief Analyst at Ingosstrakh Investment, but he doesn’t see any advantages in the tie up for consumers.

“The merger will harm competition on local flights. So far we have two large carriers on domestic routes in Russia – Aeroflot and Sibir. So ticket prices remain reasonable. If they merge the price for domestic flights may soar.”

Aeroflot's CEO says there has been no progress so far in merger negotiations with Sibir. But some experts say Aeroflot's new chairman, Russia's transport minister Igor levitin, will lobby for the interests of the flag carrier.