Aeroflot looks at budget options

Russian national air carrier Aeroflot is inheriting 6 airlines from state corporation Russian Technologies.

It will decide by the end of this month whether to go ahead with plans for a new low cost airline for the competitive Russian mass market.

General Director Vitaly Saveliyev disclosed on Thursday that Russia’s air flagship was looking at a range of options to compete in the discount market.

"A discount airline will be created on the basis of six smaller airlines. The state-owned hi-tech corporation Russian Technologies running six carriers, will merge them into Aeroflot We plan to organise one chartered flights company and may also set up a discounter."

Maxim Rozenblit, from IFC Metropol believes Aeroflot ought to be looking at new products and approaches and thinks a budget options has its upsides.

“Besides developing new foreign routes and applying aggressive policy inside the country, Aeroflot should also suggest conceptually new products. We think, the investment attractiveness of the new discounter is quite obvious, as this kind of flights have undoubtedly strong demand. Furthermore, the barriers to enter the market are minimal: today we don’t see any somewhat significant domestic player in the segment of economy – class air flights. Therefore Aeroflot could occupy the niche.”