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Ringing in the changes
01 June 2007
Read more:
Debevoise & Plimpton
Aeroflot
Sukhoi
UTair
KD Avia
While headlines continue to highlight rapid growth in India and China, it is easy to overlook what is happening in other markets. But the agenda at the 5th Annual Russia Airfinance Conference in Moscow changed a lot of of preconceived ideas about this growing market.
Aeroflot was the first to surprise the delegates when it urged the Russian market to prepare for the emergence of low-cost carriers. "The market is entering a period of rationalization and the forecast is for fewer network carriers," said a spokesman for the airline.
A number of factors have spurred rationalization in Russia, including the price of fuel, which forces some carriers to refuel abroad. "By not taking on new aircraft, the market is spending $1.5 billion extra on fuel," said the Aeroflot spokesman.
Limited aircraft production in Russia means that carriers are importing second-hand aircraft. Other trends in the Russian market include increased...
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