Why not to fly: how the conflict between Russia and the West affected airlines

Transaero has suspended flights from Moscow to Toronto, Aeroflot will decide the fate of direct flights this week. However, there will be flights to New York City.
11.09.2014
Forbes
Origin source
As it became known to Forbes, the largest Russian airline refuse direct flights to Canada. "Transaero" has suspended flights from Moscow to Toronto, Forbes confirmed by the airline. "Aeroflot", according to of Forbes, will decide the fate of its direct flight to the largest city in Canada on the board of directors on 18 September.

The reason for both companies, one - low efficiency. Experts say reducing the volume of transportation of the two Russian companies in North America and is associated including with increasing tension in relations between Russia and Western countries.

Reducing flights occupancy lately observed not only in Toronto, but in New York.

However, "Transaero" of Forbes assured that "flights to New York will be carried out during the autumn-winter season 2014-2015 with a frequency of up to five times a week." The "Aeroflot", according to a source in the company (from the official comments in the "Aeroflot" abandoned), issues with flights to New York are not even discussed ":" This is one of the most profitable areas of the company. "

Refusal of flights to Toronto on income effect is readyfor less.

"Flights to Toronto temporarily suspended in view of the current market situation", - said the head of the Directorate for Relations with "Transaero" Sergei Byhal public. According to him, the flight Moscow - Toronto fly once a week. "Aeroflot" flies in Toronto twice a week, according to a source in the company, this "trend is very unstable."

According to the analyst IR "Region" Alla Jurova, the number of Russian airlines passengers on flights to North America in the first half of 2014 increased by approximately 16% compared to last year. But the number of passengers on the "Aeroflot" flights to the United States, according to the IR "Region", decreased by 0.1% and passenger turnover - by 2.4%. This seat occupancy rate fell by two percentage points. "Therefore, the efficiency of commercial flights could be reduced," - admits Alla Yurov.

According to the "Region", the proceeds of "Transaero" flights from the US in the first half of 2014 decreased by 14% to 5.2 billion rubles. "According to the company, this is due toreduction in traffic volumes in the Americas, "- said Yurov. Analysts attribute what is happening with the weakening of the ruble and rising international tensions between Russia and the West.

"I suppose that the main reason for the closure of some flights to North America - reducing demand for these destinations. This is facilitated by both economic and political reasons ", - concludes the analyst" Investkafe "Roman Grinchenko.