Foreign carriers to earn big bucks on Moscow-Kiev route

Flights between Moscow and Kiev were formerly one of the most popular requests on Russian online ticket-selling services. Source: RIA Novosti/Maxim Blinov

Flights between Moscow and Kiev were formerly one of the most popular requests on Russian online ticket-selling services. Source: RIA Novosti/Maxim Blinov

Direct flights between Russia and Ukraine ended on October 25 after tit-for-tat suspensions by Moscow and Kiev. Foreign carriers will now divide the market, which earned Russian and Ukrainian carriers 7-8 billion rubles ($112-128 million) a year, and pocket the profits.

Foreign airlines are stepping in to fill the space left by Russian and Ukrainian carriers, after direct flights between the two countries were suspended on October 25. While passengers will still have options, it is now impossible to get from Moscow to Kiev without a transfer.

Flights between the two capitals were formerly among the most popular requests on Russian online ticket-selling services. Around 100,000 passengers flew between Russia and Ukraine every month, according to data from Aviasales.

Since relations between the two countries plummeted in 2014, over Russia’s takeover of the Crimean peninsula and subsequent backing for pro-autonomy rebels in Ukraine’s eastern Donbass region, the suspension of direct flights is just the latest in a series of tit-for-tat political and economic moves made by Kiev and Moscow.

According to Russia’s Federal Air Transport Agency, 800,000 people flew to Ukraine in the first three quarters of 2015.

"Regardless of the political situation, Kiev continues to be ranked as one of the most popular foreign destinations. It is not so much about tourists, as it is about relatives and business partners," said Alexander Sizintsev, head of the Biletix online travel agency.

Who will use transit flights?

According to estimates of analysts with Russian travel website Tutu.ru, the share of foreign carriers operating between Russia and Ukraine; Belavia, Turkish Airlines, LOT Polish Airlines, Air Baltic; amounted, until recently, to less than 1 percent of the total number of tickets purchased. Their share, more recently, has risen to almost 14 percent in sales and to 25 percent in actual departures.

According to the market participants interviewed, the main beneficiaries have been the national airlines of Belarus (Belavia), Latvia (Air Baltic) and Moldova (Air Moldova).

Source: Alena Repkina

These carriers will divide a market worth 7-8 billion rubles per year ($112-128 million) – this is the total revenue of the Russian and Ukrainian companies from direct flights as assessed by Transport Minister Maxim Sokolov at the beginning of October.

"The Moldovan air carrier has some of the lowest fares and convenient connections – a total travel time of about four hours and a little more than 5,000 rubles ($80) for a one-way ticket," said Konstantin Parfyonenok from Andgo.travel.

Passengers will inevitably end up shouldering higher costs and looking at longer travel times, since the new alternatives involve a transfer in a third country, but as Roman Zakharov, chief editor of air travel magazine Liniya Polyota, pointed out, this is unlikely to deter travelers.

"Ticket prices from all the three carriers are 20-25 percent higher than direct flights. But, given the fact that the prices of train tickets are relatively high, these routes will be in demand," he said.

Zakharov pointed out that as soon as the suspension of flights was announced, these carriers announced that were are ready to serve Russian-Ukrainian transit routes through their hubs in Minsk, Chisinau, and Riga.

"The difficult situation is only in [the Ukrainian cities of] Dnipropetrovsk and Lviv, where there is not yet an alternative to direct communication with Russia," he said.

Central Europe as a transit hub?

Other major European carriers also fly to Ukraine, for instance Lufthansa via Frankfurt and Munich, and Austrian via Vienna. However, they are unlikely to become a full-fledged alternative for passengers.

"These airlines have a higher price tag and a longer total flight time," said Parfyonenok, giving several examples: instead of 11,000-14,000 rubles ($175-223), a two-way ticket would cost 15,000-18,000 rubles ($240-290), while the travel time in each direction would be two to three hours longer than with Belavia and Air Moldova.

"With the same result, we can speak about flights via Amsterdam or Baku. But they are also likely to be less convenient for passengers," said Parfyonenok.

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