Russia's first budget airline takes to the air
Source: Reuters
By Olesya Dmitracova MOSCOW, Jan 29 (Reuters) - Russia's first budget airline, SkyExpress, piloted its maiden flight on Monday and promised to shake up the market for domestic air travel in the world's largest country. A Boeing-737 airplane, painted with a multi-coloured SkyExpress logo, headed for Russia's Black Sea city of Sochi. By the end of the year, the company aims to fly regularly to 11 Russian cities within 800 km (500 miles) to 3,000 km of Moscow. SkyExpress prices start at 500 Russian roubles ($18.82) for a one-way journey booked in advance. By comparison, Aeroflot <AFLT.MM> on its Web site offered advance tickets to Sochi at 82 euros ($105.90). "This is really cheap," said Konstantin Yershov, 20, queuing to check in for the flight. "At first I thought it was a joke." If SkyExpress is successful, other Russian carriers, many of them monopolised, will have to lower their prices, said Konstantin Makiyenko, an expert at the Centre for Analysis of Strategies and Technologies. "But that's only in theory, because in Russia 'discounters' have not been very successful so far," he added. Speakers at the SkyExpress launch ceremony at Moscow's Vnukovo airport said the carrier's low-price policy would make air travel available to many more Russians. "Population mobility is the most significant feature of a country's economic development," said Igor Konkov a top official in the ministry of economic development. The new carrier has attracted foreign investment, with the European Bank for Reconstruction and Development (EBRD) buying a 20 percent equity stake in SkyExpress. "An essential part of the transportation sector ... was so far missing," Florence Bachelard-Bakal, a senior EBRD banker, told Reuters. "The low-cost model was so far not present." SAFETY AMBITIONS Other shareholders include KrasAir, Russia's No. 3 airline, two investment funds and a number of private investors, with no one having a majority stake, a SkyExpress spokeswoman said. Air travel in Russia nosedived from more than 130 million passengers flying across the Soviet Union some 15 years ago to fewer than 20 million crossing the airspace above Russia today, according to the EBRD. High prices by comparison with the average Russian income as well as safety concerns prompted the decline. Russian airlines are notorious for their poor safety standards, especially on domestic flights. Last year two Russian-operated planes crashed, killing almost 300 people. SkyExpress Chief Executive Marina Bukalova said the company's main goal for this year was to obtain an international safety certification, IOSA, so far awarded only to Russia's flagship carrier, Aeroflot. "The health of every (air) company is determined by its safety. Therefore, I wish this company safe flights," said Yuri Tsybin, a representative of Russia's national aviation authorities. Air travel safety was in the news again on Monday when a Russian airplane made an emergency landing at Moscow's Domodedovo airport after problems with one of its engines, officials and media said. None of the 60 passengers and crew were hurt, an airport spokeswoman said. (Additional reporting by Maria Golovnina)
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