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Growth of low cost subsidiary

Aeroflot pushes Pobeda forward with 50 Boeing 737

Aeroflot intends to push ahead with the expansion of its low-cost subsidiary. In return Pobeda will receive Boeing 737 from Aeroflot. This also has advantages for the parent company.

Aeroflot CEO Vitaly Savelyevs presented a new growth plan to Russian Prime Minister Mikhail Mishustin this week. Only a few weeks ago, after heavy losses due to the corona crisis, Russia announced that it would support the airline with aid payments equivalent to about one billion euros.

The airline aims to carry 130 million passengers by 2028. Two years ago, the figure was almost 36 million. An important role in Aeroflot’s plan is played by low-cost subsidiary Pobeda. About half of the passengers are to be carried by the daughter. In order to cope with the planned expansion from currently 30 to 170 aircraft, Aeroflot will hand over aircraft.

Question mark over 737-max order

As the Vedomosti newspaper has learned from internal sources, Aeroflot will cede all 50 Boeing 737-800 to Pobeda from next year until 2023. The short- and medium-haul aircraft is already being used by the low-cost airline. The measure will enable Aeroflot to transfer capacity to its subsidiary and ensure a rapid supply of new aircraft.

It is uncertain what will happen to the order for 30 Boeing 737 Max aircraft for Pobeda. The aircraft is still grounded. Also because production of the Boeing 737-800 was discontinued last year, the leasing rates for additional copies are currently relatively expensive.

Aeroflot has to accommodate MS-21 itself

Aeroflot is also reducing the number of aircraft types in use with the delivery of the Boeing 737-800 to Pobeda. On short- and medium-haul routes, the core airline also uses the Airbus A320. In the near future Aeroflot will also be operating at least 85 of the Russian competitor to the A320 and 737 , the Irkut MS-21.

Last year, the government in Moscow also pressed for the type to be used by the low-cost subsidiary. The order of the 737 Max for Pobeda is to be replaced with the domestic model according to the Kremlin’s wishes. Because Aeroflot is now creating space  for the Russian jet, Pobeda could continue to maintain a one-type fleet for the time being – an important instrument for low-cost airlines to keep costs down.

Expensive conversion

Despite the relatively inexpensive solutions for enlarging Pobeda, Aeroflot has to bear some costs. So far, the Boeing 737-800 has been equipped with a two-class cabin and a galley. According to internal sources, the conversion to typical one-class low-cost planes with more densely distributed chairs and a smaller galley will cost around 800,000 dollars per aircraft.

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