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Russian passengers return to favoured destinations and find new ones

Outbound Russian international PAX has been experiencing a well-documented period of dynamic recovery since late 2016, and 2017 saw a welcome reversal in fortunes for the country’s key international airports following double-digit declines in 2015 and 2016.

Total international traffic at Russian airports recorded an impressive +25% leap in 2017, with particularly strong growth in the Summer months of May, June and July when combined they enjoyed peaks of over +30% versus 2016 in each of these months. Growth proceeded to moderate somewhat in Q4 2017 with an average increase of +16% (versus the +27% experienced in the first nine months of the year) which is to be expected as they entered the second full year of recovery. Despite strong growths throughout the first three quarters, however, it was only from July 2017 onwards that Russian airports recorded real growth versus levels seen in 2014.

Moscow Sheremetyevo has been the main volume driver. Russia’s top international airport handled just under 3.3 million additional international passengers (departing and arriving) in 2017 compared with 2016 at an impressive growth rate of +17%. In the same period Domodedovo handled 1.7 million additional passengers.

The capital’s tertiary airport, Vnukovo, was also key to growth. Like Sheremetyevo, the airport added over 3 million additional passengers and in doing so almost doubled its 2016 total of 3.5 million (+87%). Krasnodar recorded the top growth rate (+66%) of the seven airports covered, however in real terms this equated to just under 300,000 PAX, bringing annual PAX to 700,000.

Following improved political relations with – and the resumption of flights to – the country, Turkey has regained favour with Russian travellers, climbing back up the ranks to end 2017 the fourth most popular destination country and top by percentage growth, though from a diminished base (+102%).

Of the other top growth destinations, several already have significant scale. Ever-improving flight connectivity with China and common political ideology continues to boost business and leisure (“Red Tourism”) travel between the two Communist powerhouses, while in Europe destinations across the South – Spain and Italy – which initially gained favour while traditionally popular tourist hotspots across Turkey and Egypt were out of bounds, have continued to attract high levels of Russian visitors.

Looking forward to the first eight months of 2018, growth at Russian airports looks likely to be moderate, with total international capacity only +2% ahead of the same period in 2017. However, Sheremetyevo (+10%) and Vnukovo (+23%) will continue their strong growth trajectory with double-digit increases in flights, as well as Vladivostok (+22%). Domodedovo, despite capacity currently sitting -11% behind last year, will still remain a key gateway for Russian PAX, accounting for over one in five flights departing the country.

Some former Soviet states look set to see declines such as Tajikistan (-14%) and Armenia (-12%), as well as Ukraine (-30%). Italy (+33%) and the UAE (+33%) will continue to see an uplift in scheduled services from Russia, while among less popular markets interest appears to be developing in Scandinavia; Finland (+39%), Sweden (+24%), and direct flights to Iceland offered for the first time – as well as other parts of Europe such as Hungary, Poland, and Greece.

“In terms of the airport destinations with the most growth potential, Dubai, Rome Fiumicino, Seoul Incheon, Istanbul Ataturk and Tbilisi will offer increased opportunities to target Russian travellers this year, each displaying strong growth despite their already significant scale,” suggests CiR President Garry Stasiulevicuis. “As well as these locations, Doha, Budapest, Berlin Tegel and Milan Malpensa are displaying significant growth. Minsk, Yerevan, Tel Aviv, Prague and Beijing Capital, despite not seeing the same level of increases in capacity from Russia remain in the top ten destination airports by absolute capacity.”

CiR forecasts predict that Russian outbound PAX has the potential to grow by +114% in the next decade, a growth rate second only to Indians out of the top 25 nationalities globally, with departing international PAX figures set to return to real growth versus pre-crisis levels at some point during 2018. “Russian airports could benefit further towards the end of the year as they will expect to see an influx of foreign arrivals as the country hosts the FIFA World Cup, which returns to Europe for the first time in twelve years,” continues Stasiulevicius. 

“However, this may not necessarily translate into large, or any, increases in airport PAX numbers, as we expect Russians themselves will be more likely to stay in the country during these months,” warns Stasiulevicius. “As we saw in the UK with London’s airports during the 2012 Olympics, increases in foreign arrivals were offset by a decline in local departures, with the result that any change in overall airport passenger numbers were pretty negligible.”

NB. PAX Source: CiR Business Lounge | Advanced Analytics Tool - Data based on Scheduled departing international passengers only. Data displayed for nationalities is based on residency through place of ticket purchase
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