Budzhetny Perevozchik has already applied for an operator certificate at Russia’s Federal Air Transport Agency. Source: Maxim Blinov / RIA Novosti
Aeroflot, Russia's largest airline, has decided not to develop a new budget airline brand. While Dobrolet is still on the EU sanctions list, the low cost airline will be called Budget Transporter, reports the Russian business newspaper Vedomosti, citing a source within the airline. "Why develop a new brand when there exists the well known Dobrolet, which already has its value," says the source.
When the low cost airline was placed on the EU sanctions list in July 2014 because of its flights to the Crimea, European transactors, such as Lufthansa Technik, were no longer able to service it. Aeroflot then thought of creating a new brand, but during one of the mother-company board meetings a different decision was taken.
The Budget Transporter will operate according to a minimum scale: its fleet will consist of four Boeing 737-800s, taken under subleasing agreement from Aeroflot itself, while new planes will not be bought. Therefore, it is possible that there will be no brand name written on its fuselages, only Budget Transporter, with small letters.
Experts believe that the absence of a brand name will doubtfully influence the low cost airline's marketing campaign. "For a budget transporter the brand name is not important since the main reason to buy tickets here is the low price," says General Director of Brand Lab Alexander Yeremenko. He thinks that Russian low cost airlines do not need image advertising since there is no competition in this market and all the promotion is created with the direct advertising of the tickets' cost. "Before the 2008 crisis we had two budget airlines, Avianova and Sky Express (later both closed down), but even back then they didn't compete with one another, since they flew to different cities," notes Yeremenko. Moreover, according to Yeremenko, even the legal name Budget Transporter can use the brand Dobrolet onboard its planes.
"I don't see any risks related to the additional promotion of the nameless brand," states Irina Zelenkova, Advertising and PR Director at FinExpertiza. In her words, Aeroflot can permit itself such a move because the recognition and weight of its brand, especially in Russia, does not raise any doubts. "Consequently, the Aeroflot low cost project will be just as recognized and transparent in the eyes of a specific clientele - simply because it will be associated with its strong mother company," says Zelenkova. In her words, Aeroflot's Budget Transporter actually has no competition in Russia. Therefore, it can easily do without a vivid brand and base its reputation on its provenance. That should be a convincing argument.
Plans for the future
While Dobrolet is still affected by the sanctions, the airline cannot use this brand when working with foreign transactors. That is why the legal name of the new airline, Budget Transporter, with Aeroflot's 100-percent participation, was registered in September 2014. Dobrolet's former general director received the same job with the new company. The new company has already applied for an operator certificate at Rosaviation, a document that is required for operating flights. After this Budget Transporter can receive a license and start selling tickets.
"Aeroflot is convinced that the sanctions against Dobrolet are temporary and that there will be demand for the company's services due to its unique offer, even without the additional advertising," says Investcafe analyst Timur Nigmatullin. In his words, the absence of advertising costs may further stimulate consumer interest. "Thanks to the economic conditions, the company can maintain low ticket prices, which is the new airline's main competitive edge," Nigmatullin adds. The low cost airline was planning flights abroad, to Spain and Israel, for example, however, with the sanctions still in place, the company has postponed them for now.
The question of a gradual cancellation of the sanctions may be raised during the EU Summit on October 23-24, depending on the development of the situation in Ukraine, reported Russian news agency TASS citing a diplomatic source within the mission of one of the Eastern European countries.
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