Monday, 5 November 2018

Aeroflot's board approves new “100 By 100” growth strategy

targets 100 million passengers by its 100th anniversary

The Board of Directors of the Aeroflot Group have approved the Company’s new Growth Strategy for the period through 2023, which is called “100 Million Passengers by Our 100th Anniversary”

According to the details, the new strategy is aimed at working toward the group carrying 90-100 million passengers in 2023, which is when Aeroflot will celebrate its centenary. Also part of the new development plans is to make the Group's low-cost carrier Pobeda further penetrate both the domestic and regional markets and be a key growth driver. The aim is to have Pobeda to carry 25-30 million passengers annually by 2023. 

Rossiya Airlines, which is the Group's mid-market carrier, will become the principal carrier aimed at increasing social mobility on routes between the European and Far East parts of Russia, with flat fares lower than those offered by the main Aeroflot operation. Aurora, the Far East regional carrier, is expected to double its operations by 2023.

Another key goal of this new strategy is to increase international transit traffic from 5 million passengers in 2017 to 10-15 million by the time 2023 comes around. It is hoped that the airline can capitalise on its geographical location which has competitive advantages in the Europe-Asia transit sector. Aeroflot offers flights up to three hours shorter than peers on these routes and has the lowest costs.

Aeroflot will open regional hubs across Russia by 2023, according to the 100 by 100 plan, those three hugs will be Sochi, Ekaterinburg and Novosibirsk, as well as one international hub in Krasnoyarsk. The Group plans to almost triple regional traffic from 7 million passengers in 2017 to 19 million passengers in 2023. Aeroflot Group will make a significant contribute to the implementation of the Russian President’s decrees to expand the network of scheduled inter-regional passenger routes, so that by 2024 50% of total scheduled domestic flights bypass Moscow.

Also as part of the development plans is to increase the share of modern Russian-built aircraft in the Group's fleet. Taking into account all contracts – both those already completed and those recently signed – the Group expects to operate 200 SSJ-100 and MC-21 aircraft by 2026. To continue with this part of the plan, the Aeroflot Group will work with United Aircraft Corporation to ensure that all Russian-built aircraft meet the highest international standards. To achieve its target passenger traffic, the Group will have to operate a total of approximately 520 aircraft.

Digitalisation will also play a significant part of the future development of the company, according to Bain & Company, Aeroflot already ranks fourth among legacy carriers globally by the level of digitalisation and 100 by 100 will see that cutting-edge technology continue to be used and developed including the use of artificial intelligence.

(Photos Aeroflot)