Exclusive: Aeroflot restores Soviet-era routes at home amid closed borders – CEO

Stock Markets25 minutes ago (Jun 08, 2021 06:40AM ET)

(C) Reuters. FILE PHOTO: The logo of Russia’s flagship airline Aeroflot is seen on an Airbus A320 which landed after an inaugural trip at the Marseille-Provence airport in Marignane, France, June 1, 2019. REUTERS/Jean-Paul Pelissier/File Photo

By Gleb Stolyarov and Katya Golubkova

ST PETERSBURG, Russia (Reuters) – Russia’s top airline Aeroflot is restoring Soviet-era routes hoping that direct flights which bypass traditional hubs help increase traffic amid closed borders, CEO Mikhail Poluboyarinov told Reuters.

Like many other airlines globally, Aeroflot received a cash injection from the government, its controlling shareholder, last year to support it through the pandemic.

The company is now talking to the government about issuing state-guaranteed debt, Poluboyarinov said in an interview, and is adding new domestic routes so people can fly between cities including resorts avoiding hubs such as Moscow.

“We made big steps to adjust our route network. Aeroflot refreshed Soviet practise, its Soviet network… almost all the fleet is now busy,” he said.

Over 80% of Aeroflot’s seats are now taken while Pobeda, its low-cost unit, has a 98-99% load factor.

Despite starting to recover from last year when Aeroflot lost more than half of its traffic and fell to a 123.2 billion rouble ($1.7 billion) loss, Poluboyarinov does not expect its passenger traffic to return to pre-pandemic levels before 2024.

“Even if we get all permissions, who knows how many people would fly? The pandemic is still there. The re-opening of international flights depends on collective immunity… Vaccines should be mutually approved,” he said.

Aeroflot, which operates 334 passenger planes, including Boeing (NYSE:BA) and Airbus, is slightly delaying the delivery of new jets it ordered before the pandemic, Poluboyarinov said, facing no penalties as “everyone accepts and understands” the current circumstances.

($1 = 72.6375 roubles)

Exclusive: Aeroflot restores Soviet-era routes at home amid closed borders – CEO

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