The difficult political and economic situation is starting to affect the Russian bizav market. According to the German consultancy Wingx Advance, the number of business aviation flights into Russia and the CIS dropped 31% year-on-year in the first eight months of 2014. Bizav traffic between Russia and Europe dropped by 6% over the same period. In August alone, bizav activity shrank by nearly 17% compared to the same period in 2013. The crisis is also noticeable in Ukraine and Turkey (a drop of around 40%), as well as in all of Eastern and Central Europe.
Avinode, the world’s largest business charters booking platform, confirms that the number of requests for business travel from Russia and the CIS decreased by 5% year-on-year in the first eight months of 2014, while other regions of the world continued growing. In Europe, for example, the number of bizav charter bookings grew by 30% over the same period.
Georgy Sharov, CEO of Vnukovo 3, which is the largest business aviation center in Russia and the CIS, mentioned the market crisis back in early September, saying his company did not expect any operational growth because of the difficult political and economic circumstances. Another factor preventing Vnukovo 3 operations from expanding to other Russian regions is that bizav infrastructure is virtually non-existent in airports across the country, for the exception of Moscow’s three major airports and St. Petersburg’s Pulkovo.
Vnukovo 3 handled 19,437 bizav flights in 2013, which is comparable to pre-crisis 2008 and five times more than 10 years ago.
Speaking at the JetExpo 2014 exhibition in Moscow in early September, Evgeny Bakhtin, vice-president of Russian United Business Aviation Association (RUBAA), mentioned other problems of the sector. According to him, the primary challenge faced by Russian business aviation is that airports and ground handling agents hold the monopoly on the market. Combined with many other factors, this results in unjustified high handling prices for business aircraft, limiting the affordability of bizav services and throttling the sector’s development.
Wingx Advance blames the market decline on the political crisis in the relationships between Russia and Europe. Fewer business aviation flights depart from Russia not just for Ukraine but also for France and Switzerland. In the first two months of 2014, bizav services were growing at over 10% per month, whereas in March, when Russia annexed Crimea, traffic began shrinking considerably. The most noticeable drop, at 40%, was observed in services between Russia and Ukraine.
Despite this, Ukraine remains among the top five of the most popular countries among bizav passengers flying from Russia, according to the Wingx Advance statistics for the first eight months of 2014. France tops the list, followed by Italy, Germany, and Switzerland.
According to Avinode, Nice was the most popular foreign bizav destinations for Russian customers between September 2013 and August 2014. It was followed by Geneva and Aix-les-Bains in the Rhone-Alpes region in South-Eastern France. The top 10 destinations also included Dubai, Pisa, Le Bourget, Luton, Sochi, Olbia in Sardinia, and Antalya.
Domodedovo Business Aviation Center reports that European destinations accounted for the greatest portion of all bizav flights handled by the airport in September 2014. Germany enjoyed the greatest popularity with nearly 14% of all flights, followed by Italy (almost 11%) and France (9.5%).
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