Sibir first half figures establish the Siberian carrier as a strong performer on the Russian airline scene

Published: 8/5/1999

For the aggressive Siberian carrier Sibir, recently emerging from the abortive merger plans with Vnukovo Airlines, the first half of 1999 appears to have firmly established it as an extremely well managed airline capable of sustaining expansion of its business even in adverse market conditions. According to the company it now ranks as the fourth largest carrier in Russia in terms of passengers carried and second to third in terms of RPK. In contrast to the rest of the sector, the airline saw substantial growth in revenue passenger kilometre of 32.4% compared with first half of 1998, and a revenue tonne kilometre increase of 33.5% over the same period from its cargo business. The number of passengers during the first half increased from 246,675 in the first half of 1998 to 314,264 in same period in 1999 an increase of 27.4%. In the cargo area the airline saw its modest cargo business grow from 2,361 tonnes to 3,442 tonnes. Overall the airline flew 21.8% more flights. On the revenue side for the airline however, after the impact of devaluation, the airline while seeing an increase in ruble revenues of 120%, saw revenues in dollars fall by 43%. Losses however, narrowed considerably with rouble losses declining from 37.37 m to 10.1 m roubles a decline of 73%, with losses in dollars falling to 0.43 m a decline of 93% from the first half of 1998. While the company has not gone into detail in explanation of the decline of losses other than to state that the airline saw an improvement in operating results through operating more efficiently. The statement from the company however, reveals a little more detail. The company has increased revenues through price hikes of 32% in rubles, although the full impact of the rises have been somewhat blunted by the increase in the price of aviation fuel which rose by 91% in the same period prices catching up with the devaluation of the ruble. During the last six months the company has acquired a number of troubled carriers in Siberia with the rumoured help of the now superseded Federal Aviation Service and has gained access to cities such as Kemerovo. The airline has been an aggressive buyer of aircraft at low cost from its troubled competitors to upgrade its fleet. Sibir's fleet grew in the first half through the acquisition of four older Tu-154Bs and one Tu-154M, joining the airline's fleet of 30 aircraft including 8 Il-86s and 19 Tu-154 Bs and Ms. Despite this relatively old fleet however, Sibir appears to have achieved substantial improvements in operating times over their competitors. According to the company, in H1 99 compared with H1 98 the airline achieved an improvement of hours flown of over 52.7% on its Tu-154Bs and 17.4% on its Tu-154Ms.Some of the Bs are now reported as flying 250 hours a month with some of the Ms flying 300 hours a month, figures substantially above those reported by other Russian airlines. These figures suggest that the airline has been strongly tackling both the issues of maintenance and of schedule organisation .The question for Concise however, is how long can they sustain it given the high level of maintenance required for most Russian types. The acquisition of cheap aircraft with additional hours will allow them some flexibility, but the source of available aircraft will decline over time. The company has been working on the development of its route network and now operates a summer schedule of 100 flights a week to 20 cities within Russia and 20 international destinations. The company has substantially increased it flights during the summer period from Siberian cities to the Russian Black Sea resorts, with Novosibirsk to Sochi increasing to 5 flights a week. Internationally the airline opened flights to Hanover from Omsk on the 15th May and increased its frequency from Novobirsk to Frankfurt to 5 flights a week and to Hanover to 4 flights a week. The company during the last few months has undertaken investment in its representative offices opening modern offices connected to both the Russian and international online booking systems in Novosibirsk, Tomsk and Barnaul, with plans to open additional office in other Siberian cities, as well as offices in Germany and Uzbekistan.

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