“Using the SSJ 100 keeps the competition going”

Why did Azimut increase the share of international flights by an order of magnitude in 2022, how does this fit into the company’s strategy and how effective was the use of the SSJ 100 for flights abroad, Kommersant was told by the chairman of the board of directors of the airline Pavel Udod.

– Do we understand correctly that last year international flights accounted for about 5% of Azimuth’s passenger traffic, and this year it is already 50%? How effective was the decision to reorient the fleet?

— The share of passenger traffic on international routes in 2021 amounted to about 5.8%, by the end of 2022 it will grow to 50%. Azimuth Airlines is developing within the framework of the chosen business model, the strategy of which provides for the development of direct routes from airports in the south of Russia to domestic destinations with a subsequent increase in the share of international flights. In 2021, the share of international destinations was 25%, this year it has increased to 41%.

The route network has been adjusted due to the closure of two of the three base airports, which accounted for 70% of air traffic (Krasnodar and Rostov-on-Don.— “b”). Azimuth faced serious challenges related to the need to temporarily relocate personnel to Mineralnye Vody, as well as to ensure flights in conditions of limited use of airspace.

– International flights turned out to be more profitable on average than flights to subsidized regional destinations?

— No, our experience has shown that the profitability on international routes is approximately equal to the efficiency of flights on subsidized routes.

Our profile is air transportation in the south of Russia. Due to the fact that this strategy cannot be fully implemented in the current conditions, Azimut partially transferred the fleet to operate flights to popular destinations, taking into account social significance, while we retained our base in the south: 12 out of 16 aircraft are based at southern airports. Azimut created a temporary base in Sochi and strengthened the existing base in Mineralnye Vody.

— How difficult was it for the SSJ 100 to compete on cost per flight with larger foreign aircraft? Would the prices for flights abroad have been lower this year if instead of SSJ you operated a similar number of your own foreign aircraft?

“We operate in markets with limited demand, so the SSJ 100 shows its effectiveness in terms of passenger capacity. In 2022, passenger seat occupancy on Azimuth flights increased to 88% from 86.9% in 2021. The SSJ 100 aircraft effectively implements the goals set by the strategy of Azimuth Airlines. The use of SSJ 100 aircraft is organic and allows you to withstand competition.

— Do you plan to maintain an active presence on international airlines?

— We are focused on the development of the route network from airports in the south of Russia, this is our competitive advantage. Azimut’s international routes from airports in southern Russia are a natural continuation of the development strategy at southern airports. As I said, the economic efficiency on international routes is comparable to the profitability of subsidized routes, so the goal of Azimuth Airlines is to develop regional transportation. The route network in 2023 will consist of 84 destinations, the share of domestic destinations will be about 60%.

Interviewed by Aigul Abdullina