Aeroflot will continue Transaero flights to December
Troubled Russian carrier Transaero will continue to fly to and from Cyprus until October 15 after which statecontrolled Aeroflot has pledged it will take over Transaero flights scheduled until December 15, according to the Russian ambassador in Cyprus.
He reassured Energy and Tourism Minister Giorgos Lakkotrypis that the flights would continue and Cyprus would not be affected by a loss of some 30,000 pre-booked holidaymakers.
A Ministry official briefed the parliamentary trade committee that from September until November, Transaero was scheduled to carry 32,000 passengers from Russia to Cyprus, while Costas Koumis, Vice Chairman of the Cyprus Tourism Organisation said that the closure of Transaero was a cause for concern, especially after takeover talks with Aeroflot did not proceed.
“We are concerned about developments, but we can deal with the situation,” he told MPs, noting that “the situation is changing.”
According to Koumis, there was a 16% increase is in arrivals from the UK while tourists from Germany increased by 70%, both of which compensate for the lsos of tourist arrivals from Russia.
He that the CTO never abandoned the promotion effort in Germany and that “we continue to invest in that market”. He added that there is also an increase of tourists from the Dutch market and from Israel.
Koumis added that the number of tourist arrivals from Israel was 96,000 while a 50% increase in arrivals from France is expected in 2016.
On Friday, Transport Minister Marios Demetriades had said that the potential collapse of Transaero, Russia’s second biggest airline, will have a “minimal” impact on Cyprus, as only 30,000 are scheduled to arrive on the island until the end of the year, with 350,000 already carried this year.
Trasaero is the primary carrier to Cyprus for BiblioGlobus, the tour operator that accounts for 70% of all Russian arrivals on the island. Rival state-controlled Aeroflot, with whom takeover talks failed on Thursday, will probably take over this added traffic for the rest of the year, until a second scheduled airline is designated for next year in accordance with bilateral treaties between the two countries.
Association of Cyprus Travel Agents (ACTA) chairman Dinos Kakkouras said that Transaero flights were continuing as normal, also confirmed by Adamos Aspris, spokesman for airports operator Hermes.
“We are waiting to see how the Russian government will handle the development and we are waiting to be briefed by tour operators about what happens next,” Kakouras said.
Some 40 weekly Transaero flights between 18 Russian regional airports and Cyprus are carried out every week, with Russian now accounting for the second biggest tourism market of the 2.5 mln arrivals, following the U.K.’s 1 mln tourists.
Despite the economic crisis in Russia, due to sanctions and spiralling inflation hurting consumer spending, Russian airlines carried 63.9 mln passengers during the first eight months of the year, up 0.4% year-on-year, while in August passenger numbers grew 2.3% to 11.5 mln, continuing a trend of the previous months. International traffic was down 13.6% compared to a year ago to 28.2 mln, according to Russia’s Federal Air Transport Agency.
In January-August, Aeroflot carried 17.3 mln, up 10.2% yo-y, Transaero carried 9.4 mln, up 3.6% y-o-y, Saint Petersburg-based Rossiya, an Aeroflot Group member, carried 3.4 mln, down 0.9% y-o-y, S7 Airlines carried 5.5 mln, up 1% y-o-y, while Globus Airline, a member of S7 Group, carried 1.6 mln passengers, up 18.9%. UTair carried 3.8 mln, down 38.7% y-o-y.
All these carriers fly to Larnaca and Paphos, but have not clearly expressed a desire to take over Transaero’s capacity.
On Thursday, Aeroflot dropped its offer for a controlling stake of just over 75% of Transaero. It said that Transaero didn’t submit a formal proposal for the deal by the agreed deadline and that its board of directors wouldn’t extend the deadline for talks.
The government-brokered deal was aimed at staving off bankruptcy at the heavily indebted Transaero, which has curtailed aircraft purchase deals to save money.
The collapse of talks could have ramifications beyond Russia as Transaero is a buyer of Boeing and Airbus jetliners.
Airbus had already delayed delivery to Transaero of the first of the carrier’s A380 superjumbos, originally due this year, because of weakness in the Russian airline sector. Transaero had ordered four A380s. Airbus has been struggling to sell A380s which retail for more than $400 mln at list price, though customers typically get discounts.
The airline also had orders four Boeing 747-8 jumbo jets, which remain to be delivered.
The acquisition of Transaero would have bolstered the Aeroflot Group’s share of Russia’s airline market beyond 50%, according to the Wall Street Journal. The management of Russia’s dominant airline was apprehensive about the deal, though, because of Transaero’s financial situation, Russian airline experts have said.
Aeroflot Chief Executive Vitaly Saveliev said Aeroflot would ensure Transaero passengers won’t be impacted by the collapse of talks. “Passengers will be guaranteed transportation or a refund in the event that a flight is cancelled,” he said. Aeroflot effectively took over operational control of Transaero already last month.
Founded in 1990, Transaero had a fleet of 97 airplanes and an outstanding debt of 67.5 bln roubles ($1.03 bln) at the end of the first half of 2015. Herman Gref, head of Russian lender Sberbank, which lent money to Transaero, said earlier this year that the company’s debt issue was “serious.”
Cyprus Tourism Organisation Deputy Director Annita Demetriadou said that she expects no disruptions in October, in which more arrivals are expected compared to November and December.
Transport Minister Marios Demetriades said that a probable failure of Transaero could create a gap in Cyprus’s connectivity to Russia affecting the tourism industry.