DENMARK: Menzies Aviation Happy To Welcome New Airlines In Copenhagen And Stockholm

May and June marked an increase in the customer portfolio for Menzies Aviation’s Scandinavian stations, with the ground handler welcoming China Eastern to Stockholm Arlanda and Siberia Airlines to both Stockholm and Copenhagen Airports.

China Eastern inaugurated a new direct route from Shanghai Pudong Airport to Stockholm Arlanda on 16 June, providing connections to destinations in Asia. The airline is China’s second largest airline by passenger numbers, and operates both domestic and international flights.

In addition, Menzies welcomes Siberia Airlines’ first S7 Airlines opened two new routes between St Petersburg and Scandinavia flights to Stockholm and Copenhagen, connecting the two airports with St Petersburg, Russia.

This enables traffic growth between Scandinavia and Eastern Europe. Also known as S7, the airline will operate two flights weekly from both airports.

The airline is Russia’s largest domestic airline and operates throughout Europe, Asia and the Middle East.

Miguel Gomez, Senior Vice President Continental Europe, said: Contract wins such as Siberia Airlines and China Eastern continue to enforce our strategic expansion throughout the Scandinavia region.

Thanks to the Menzies teams at Stockholm and Copenhagen for their hard work and continued excellence.


Tourism Observer

BELARUS: Belavia Acquires New Boeing 737-800

Belarusian flag carrier Belavia has finalized the acceptance of new narrow-body Boeing 737-800s under a contract inked in 2014. The airplane with the tail number EW-457PA turned out to be the last one in the batch of three aircraft, the airline reported on its Facebook page.

The newly arrived airliner received a revamped livery just like the two previous aircraft delivered in August and September.

The new look of the airplanes is the part of the airline’s branding project.

Belavia’s acquisition of all three aircraft is brokered by the Bank of Development of the Republic of Belarus.

The carrier underlines that the new airliners will allow it to reduce operational costs and, thus, bring down ticket prices.

The Boeings will replace company’s Soviet-era Tupolev Tu-154Ms.

Therefore, Belavia sticks to its previously announced plans of switching to Western-made aircraft operations only.

Belavia arrives in Zhukovsky.

Belavia launched daily flights between Minsk and Moscow's Zhukovsky in September 2016.

Belarusian flag carrier Belavia has launched a daily Moscow service from Minsk to Zhukovsky (IATA code ZIA) in September, with evening flights departing both capitals on Tuesdays, Thursdays, and Sundays, and morning flights on the other days.

"This odd-even timetable is deliberate," reveals Ihar Charhinets, the airline’s deputy general director for marketing. "As we develop the route we are planning to add three more morning flights and four evening flights per week to eventually operate twice-daily services each way; this winter's timetable will include an additional Friday evening flight.

“We are gauging the route's popularity with 76-seat Embraer E175s, with a view to increasing capacity as required. Several flights have already been performed with 148-seat Boeing 737-300s.

On certain days of the week we will be flying bigger Boeings instead of the Embraers," he adds.

The inauguration of the Minsk-Zhukovsky service may have strategic significance for Belavia.

Belarus and Russia enjoy a fairly liberal intergovernmental agreement on bilateral air services: there are no restrictions on the number of designated carriers, destinations served, capacities, or frequencies.

The only exception is the Minsk-Moscow route, on which either side has the right to operate seven flights per week, a concession currently being used to the full by both sides.

Belavia, which already operates to Moscow’s Domodedovo (DME), is the designated Belarusian carrier for the city pair, with Aeroflot and Utair the Russian operators, and even though it is located just outside of Moscow (some 43 km from the city centre), Zhukovsky is not formally regarded as a Moscow airport.

This affords Belavia access without any restrictions.

Although the new Moscow airport remains underserved by public transport, the regional administration promises this situation will improve as passenger numbers grow over time the Zhukovsky management plans to serve 350,000 to 400,000 passengers this year and up to two million in 2017.

For Belavia, adding the Zhukovsky service to its existing Domodedovo portfolio is of strategic importance especially with regard to developing its transit traffic through Minsk.

"The Zhukovsky flight connects passengers to virtually all our European services," Charhinets notes. "We make a point of developing transfer services. The population of Belarus stands at just 9.5 million, which is less than the population of Moscow, not to mention the entire Moscow region.

The demand for point-to-point out of Minsk is there, but it is limited. Our strategy, therefore, is to go with the transfer business model; at present, more than 30 per cent of our passengers take connecting flights."

The current economic situation in Belarus has been stifling demand for direct flights. More than 50 per cent of the Belarusian economy is linked to Russia, so we are affected by the same economic processes," Charhinets explains.

The population's purchasing power in dollar equivalent has shrunk and our costs, just like those incurred by all the other carriers, are denominated in dollars.

But we cannot adjust our fares directly by tying them to the euro exchange of the day, because this way we will not be able to sell any tickets. We have to look for alternative solutions."

Belavia has been lucky in a way: because of the soured relations between Russia and Ukraine, bilateral air services between the two stopped on October 25, 2015, thereby prompting a significant number of passengers to fly via Minsk instead.

As a result, from spring 2016, Kyiv-Minsk has been the busiest route linking Ukraine and Belarus. Furthermore, an intergovernmental agreement liberalising air services between Belarus and Ukraine has enabled Belavia to increase its frequencies between Minsk and Kyiv from two to five a day, and inaugurate services from Minsk to Odesa, Kharkiv and Lviv.

Charhinets dismisses the luck factor though. We first introduced our transfer business model five years ago and we have been working actively to evolve it.

It was because of this that we managed to get a portion of the Kyiv -Moscow passengers.

We have plenty of rivals, so it is not about us having been lucky, rather about us being best positioned to operate in this manner.

Charhinets reveals that Belavia, which does not enjoy a monopoly position on any single market, has done a lot to promote and modernise its products in a variety of countries.

Amongst other developments, the Belarus airline has introduced new information technologies, joined IATA's Billing and Settlement Plan system, made sure its layover times are minimal, and introduced through fares for transit passengers.

For example, there are a multitude of possible connection flights from Paris to Moscow, not to mention direct services,he says.

However, we carry some passengers traveling from Paris on virtually every flight to Moscow. We certainly need to keep working, but we are moving in the right direction.

An additional boost to the airline's transfer business model may come in the form of a simplification of transfer rules for foreign passengers transitting Belarus, but no relevant government decision has yet been made.

There is also potential for further growth in connecting Russian regional centres to European destinations via Minsk.

Belavia's convenient geographic location makes it possible for the airline to do what Kaliningrad-based KD Avia attempted in 2007: offer Russian regional passengers transfer flights to Europe bypassing Moscow.

A combination of factors forced KD Avia to cease operations in 2009, and this business model has not been tried by anyone since.

Apart from Moscow, Belavia currently serves Russia's St Petersburg, Kaliningrad, Sochi, and Krasnodar, and formerly served Samara, Yekaterinburg, and Novosibirsk.

Restraining further development of regional Russian operations though are the high service charges Belavia is forced to pay in Russia. Charhinets reveals that the Belarus carrier is charged five times more than Russian airlines for air navigation services.

Airport handling fees are also higher, although not drastically as steep.

This price difference persists despite both countries being part of the common union state and the Eurasian Economic Union – and renders Belavia's fares so uncompetitive that it is currently cheaper to fly with a Russian carrier from a regional airport to Minsk via Moscow.

There is a possibility that this price disparity will be eliminated by late 2016: a preliminary agreement to that effect was signed more than two years ago between Russia, Belarus and Kazakhstan, but there has been no further progress, says Charhinets.

Meanwhile, a further increase in Belavia's passenger numbers may result from the company's substantial rebranding effort from mid-August of this year.

Apart from introducing an all-new livery for its airliners, the carrier overhauled the corporate style of its offices, launched new crew uniforms, refurbished its website and re-conceptualised its advertising campaign.

The management insists that with the new image Belavia will not only distance itself from its Soviet legacy but will also mark the airline's transition from a full-service business model to a hybrid concept incorporating low-cost elements. "We are not planning to turn into an low-cost carrier completely, but we are studying and introducing certain approaches along these lines," Charhinets reveals. "Last year we managed to bring our fares down by 20 per cent; this year, we aim to achieve a further 10 per cent reduction."

SLOVENIA: The Great Museum Of Illusions,

A new museum in Ljubljana promises to be a mind-bending experience. The Museum of Illusions in the Slovenian capital aims to take travellers through a series of optical illusions, holograms and more.

According to its website, visitors will have to have their cameras ready for exhibits that make people look like their head is on a platter, a rotated room where they can walk on the ceiling, an “anti-gravity” room where balls rolls upwards and water flows uphill, and an Ames room that will make visitors shrink and grow like Alice in Wonderland.

There is also the Vortex Tunnel that “will drive you crazy and make you believe you’re heavily struggling just to make a step forward through a rotating cylinder – on a surface so stable and flat”.

But the tricks are intended to do more than just disorient, they are designed to teach visitors about vision, perceptions, the human brain and science. The museum is open every day from 9 am to 10 pm and it located at Congress Square, one of the city’s central squares.

While the museum is new in Ljubljana, it’s not the first of its kind in Europe.

Zadar, Croatia also has a Museum of Illusions, as does Barcelona, Moscow and St Petersburg.

CROATIA: Croatia Airlines Starts Flights From Zagreb To Pulkovo St. Petersburg Airport

Croatia Airlines has started regular air service from Zagreb (Croatia) to Saint Petersburg (Russia). The route will be launched for the first time in the recent history of Pulkovo airport. The carrier will operate the flights from 2 June to 23 October.

Travelers will be able to fly from the Northern capital of Russia to the capital of Croatia twice a week, on Thursdays and Sundays. Comfortable Airbus A319s with a capacity of 144 passengers will be operated on the route.

Before 2015, Pulkovo airport only had direct air service with Croatian resorts Pula and Split. In 2010-2014, over 62,000 passengers used direct flights between the two cities and St Petersburg. In addition, more than 21,000 travelers flew from Pulkovo to Zagreb and back via transfers in other airports, in 2010-2014.

“Every year many Russians choose Croatia, the country of rich history, magnificent nature and landscape, as their vacation spot. With the new route opening travelers will now be able to visit other points in Croatia, Macedonia, Bosnia and Herzegovina using convenient connecting flights via Zagreb. At the same time, St Petersburg remains one of the most visited cities in Europe, with cheap Russian ruble making traveling to Russia even more attractive. It is our strong belief that the new Croatia Airlines service to St Petersburg will be in demand both among Russian and Croatian tourists, say Evgeniy Ilyin, chief commercial officer at Northern Capital Gateway LLC, the operator of Pulkovo Airport.

The tickets are already available with promo rates starting from €199 for the round trip.

Other new routes planned for launching from Pulkovo in the summer season 2016 include Shanghai (China), Corfu, Zakynthos (Greece), and Batumi (Georgia). In addition, flights to Naples (Italy), Brussels (Belgium) and several other European cities will be renewed.

Croatia Airlines is the flag carrier of Croatia and a Star Alliance member. In the summer season 2016 the airline’s route network will include 34 points in 20 European countries.

ESTONIA: Will Russian Tourists Visit Estonia

For this summertime season, worryingly low are bookings at Estonia’s hotels. Should visitors be down just as sharply as in winter, the blow for local tourism biz might prove severe. For several players, outright catastrophic.

At the moment, bookings are down from all main markets, but in a month we’ll see how dramatic it will be in peak season,said Estonian Travel and Tourism Association president Külli Karing.

If the 11 percent drop is carried over into the summer, the sustainability of the service may start to be affected, because in the summer period every percent equals a much larger amount of people and bigger money.

Lots of hotels make majority of their income in the summers and should the clients disappear, they might not be able to keep doors open.

At the beginning of the year, Estonia fell to the bottom of European tourism barrel, with Finland, and Slovakia, as in the other 16 nations surveyed by EU tourism committee the trend was uphill.

Due to poor economy, the Russians dropped their traditional travels to Estonia in the winter, leading to an over 11 percent drop, confirmed the study. The Finns, also dependent on Eastern neighbours, fared worse still – more than a fifth of visitors were lost.

Russians cut back travels into lion’s share of European nations, except for Montenegro and Romania. Therefore, the damage done to our tourism business revealed our deep addiction to visitors from the East, and an inability to replace Russian tourists with folks from elsewhere.

On top of the tourism services VAT rise, cold-bloodedly and ill-timely served up by the new government, entrepreneurs are troubled by the drying up of connections with the world outside. The disappearance of train lines to Moscow and St Petersburg may seem like a tragedy of the few railway companies, but Ms Karing says this is suffocating for all tourism companies.

Up to now, any new travel channel opened such as an air line has blessed Estonian hotels with added visitors. Tourism firms in Ida-Viru County, blooming mainly due to Russian citizens, acknowledge the downturn to come but believe their former good clients would still find the near-Narva beaches this summer as well.

To attract tourists, Ida-Viru people have joined forces, to sell packages of hotels, Narva Castle, mining museum, and Alutaguse Adventure Park.

At the moment, the tempo of bookings is below the average, the foreign tourists are fewer as they desire more options, to see more places that would be attractive, related Sergei Jegorovtsev, senior sales manager at Meresuu Hotel.

We are rather negatively affected by the campaign in Russia promoting internal tourism whereby they want people to visit Crimea and spend their money there, not in neighbouring Estonia.

As for the tourism VAT in the situation where tourists are drying up is, according to Mr Jegorovtsev, a matter of life and death. We expect the government to show understanding and support in the difficult situation: we would need help to advertise in neighbouring countries, not to have tax raised, said Mr Jegorovtsev.

Thankfully, this past month the rouble has stayed stable, making the Estonian price level much friendlier towards Russians as compared to just a few months back. While the rouble rate plummeted and Russian travel agencies sizzled in bankruptcies, bookings were cancelled en masse.

New companies arose in the place of those that went bankrupt, we begun to form relations with them, but there are fewer people coming via the new companies as the people trust them less,admitted Mr Jegorovtsev.

At the moment, we have more of the domestic tourists than Russian ones, as we have made special offers for locals.

Likewise, Narva-Jõesuu town government is predicting a drop in tourist arrivals, but is drawing its plans hoping that their summer-friends will still find the way back somehow.

We hope that Russia being so close by the people will return, said Narva-Jõesuu town government culture specialist Jevgeni Timoštsuk.

A tourist will not leave behind as much money as last year. My acquaintances and friends from Russia reckon that perhaps they will stay at a hotel, eat breakfast there, but the supper they will buy in grocery store.

With great festivity, this coming Sunday Narva-Jõesuu will open the beach season. Despite the fact that the longest beach in Estonia and probably in the Baltics was cleaned up by the start of this week and lined with changing rooms, as Postimees paid a visit is was just these five US students trying to have a good time there, who study Russian at Narva College.

It was so cold that the poor youth were shuddering. Hailing from Carolina, a lad said it was 30 degrees Celsius back home. Still, he said Narva-Jõesuu is a nice place to be.

A town of 2,700 inhabitants, Narva-Jõesuu swells to 15,000 in summer – mainly on account of Estonian domestic tourists and people from St Petersburg.

EGYPT: Egypt's National Carrier Banned From Flying To Russia

Russia's state aviation authority has banned Egypt's national carrier from flying to Russia, a Moscow airport spokesman says.
Flights from Russia to Egypt are already suspended after a passenger plane crashed in the Sinai last month.
All 224 people on board were killed, mostly Russian nationals.

EgyptAir had been the only airline flying between the two countries and the move was to ensure it met safety requirements, Russian media reported.

Sinai Province, a group affiliated to Islamic State, has repeatedly claimed it brought down Metrojet Flight 9268, flying from the Egyptian Red Sea resort of Sharm el-Sheikh to the Russian city of St Petersburg.

Western officials say there is a strong possibility that a bomb exploded on the plane, but Russia and Egypt say it is too early to draw conclusions.

Following the crash, several countries halted flights to and from the resort due to intelligence concerns - stranding thousands of holidaymakers.

Russia's action, effective from Saturday, is a further blow to Egypt's tourism industry.
Russians make up close to one in three of all foreign tourists in Egypt. In 2014, about three million Russian nationals stayed at Egypt's resorts.

EGYPT: Egypt Tourism Faces Ruin, As Tunisia Revealed 70 Hotels Shut After Terrorist Attack

Mourners gathered after the deadly assault, which killed 30 Brits

EGYPT faces ruin following last week’s air disaster after Tunisia revealed 70 major hotels have shut since it was targeted by Islamic State five months ago.

Intelligence experts suspect the same terror network planted a bomb feared to have downed last week’s Metrojet aircraft from Sharm el-Sheikh to St Petersburg killing all 224 passengers.

Brit and Russian holidaymakers are still being evacuated from the resort which has been placed in lockdown while investigators probe the cause.

But if terrorism was to blame, Tunisian officials warned Egypt would face the same demise as its tourist industry following June’s Sousse beach gun massacre which left 38 people dead including 30 Brits.

In Sousse 26 hotels have shut their doors after the UK and other nations banned all but essential travel to the north African country.

Tunisia relied heavily on British tourists with around 500,000 travelling to beach resorts each year.

And with 900,000 Brits making Sharm el-Skeikh their holiday destination, the Egyptian government is sweating on a similar type of tourism blow.

Tunisian officials said the nation’s tourist industry was on its knees.

"The situation is very sluggish," said Radhouane Ben Salah, the head of the Tunisian Federation of Hotels.

With reservations at "no more than 20%", 70 hotels have had to close since September because the lack of clients.

More are expected to follow, he added.

Ben Salah said he expected unemployment – which already stands at 30% - to climb as hotel staff would be forced out of work.

One in six Tunisians already lives below the poverty line.

The country's key tourism sector contributes to 10% of gross domestic product, and employs 400,000 people

Ben Salah said hotel owners and the government had agreed to look after employees who would be forced out of work.

He said the government would provide them with a 200-dinar monthly subsidy (£67) and social security coverage for a renewable six-month period.

But it has been badly shaken by the beach massacre and shootings at the National Bardo Museum in March which left 30 tourists dead.

RUSSIA: Pobeda pops-up in St Petersburg

Touching down in Novosibirsk on the 23 October launch of services from Moscow Vnukovo was the ubiquitous Pobeda 737-800. The Russian domestic operation will be served on a daily basis.

Another airport, another Pobeda 737-800. Perhaps more significantly, this route launch was in St Petersburg, and marked the entry of Aeroflot’s LCC into Russia’s second city. Daily connections from Ekaterinburg and Krasnodar were the inaugural services.

Pobeda, Aeroflot’s in-house LCC, has commenced its first routes into Russia’s second city – St Petersburg (LED). The two routes from Ekaterinburg (SVX) and Krasnodar (KRR) are both inbound services, with no aircraft stationed at Pulkovo yet. All four of the routes would have faced direct competition, had it not been for the demise of Transaero Airlines, which operated on the Moscow Vnukovo (VKO) to Novosibirsk (OVB) route until its AOC was recently revoked.

RUSSIA: Russian Market For Changes,Aeroflot To Absorb Transaero Airlines

Cakes and smiles: There’s some appearance of normality in the way that Russia’s air transport business has continued to function and launch important new routes in the past year, albeit miles behind its economic potential. Transaero Airlines’ flurry of new destinations includes: St Petersburg to Shanghai in June, Moscow Vnukovo to Delhi in February, and Moscow Domodedovo to Malta in April, while Aeroflot’s fast-growing low cost unit, Pobeda, which has generated near-30% growth at Moscow Vnukovo this year, launched Sochi/Adler to Kazan, amongst many other new routes, in May.

The recent announcement that Russia’s (majority) state-owned carrier Aeroflot was going to take over the country’s second biggest carrier, Transaero Airlines, will have a significant impact on competition in the Russian market. Based on latest passenger figures from the Russian Federal Air Transport Agency (Rosaviatsia) the two carriers accounted for 43% of passenger movements on Russian carriers in the first seven months of 2015. Add in the figures for Rossiya Airlines, ORENAIR, Pobeda, Donavia and Aurora, all of which are either fully-owned or majority-owned by Aeroflot, and the market share climbs to over 57%.

Passenger numbers on Russian airlines are up 1.1% in the first seven months of this year from 51.3 million to 51.8 million. While UTair and Nordwind Airlines have seen significant drops in demand, Aeroflot’s LCC Pobeda has made an impressive start, already ranked ninth among the nation’s airlines. Another fast-growing airline is Azur Air (formerly known as Katekavia – IATA code ZF), which has been around for 20 years but has grown its scheduled services significantly in recent times thanks to the acquisition of several 757s and 767s from UTair.
Pobeda driving growth at Moscow Vnukovo

Government statistics for airport traffic in the first six months of 2015 shows a mixed picture. Of the top 15 airports 11 are showing a drop in traffic compared to the first half of 2014, with Rostov-on-Don seeing the biggest drop of almost 17%. The rapid growth of Aeroflot’s in-house LCC Pobeda at Moscow Vnukovo has helped the airport move past St Petersburg into third place among Russian airports. Sochi/Adler is apparently still benefitting from its raised profile and new infrastructure after hosting last year’s winter Olympics.

The fastest-growing airport according to these statistics is Simferopol, in the disputed region of Crimea. Since February 2014 the airport has been under the control of Russian forces and the airport now handles flights almost exclusively to and from Russia. As a result, passenger numbers at Russian airports (including Simferopol) are up 0.5% in the first half of 2015. If Simferopol is not included, demand across Russia’s other airports is down 1.3%.

An Istanbul-style mega-hub for Moscow? These images are from a magazine produced in Russia in 1992 by the anna.aero publisher, Paul Hogan, who was involved in British Airways’ plans for “Air Russia” – a proposed Helsinki-style hub at Moscow Domodedovo. Hogan believes the potential for a Moscow mega-hub as good as Istanbul persists, and this was the subject of his presentation at the CEE Aviation conference in Budapest 3 September.

China and Turkey capacity still growing
Using OAG schedule data (which still considers Simferopol in Ukraine) a comparison has been made for the leading country markets from Russian airports in September 2015 and compared with September 2013. On this basis, not surprisingly, Ukraine has become the leading international country market with seat capacity doubling in two years. However, if we were to exclude flights to Simferopol (which account for 80% of the seat capacity), Ukraine would become only the tenth biggest market, with capacity down 60%.

Again comparing international services between September 2013 and September 2015 reveals that among western European airlines, Germany’s two leading carriers have made significant reductions in seat capacity, with airberlin down 40% and Lufthansa down 50%. In the last week, Lufthansa has suspended three Russian routes; from Frankfurt to Moscow Vnukovo, Nizhny Novgorod and Samara. airberlin has axed its Berlin Tegel-St Petersburg connection and its Munich-Moscow Domodedovo service.
Moscow’s potential as a mega-hub explored

Last week anna.aero’s publisher, Paul Hogan, gave a presentation at the CEE Aviation Conference in Budapest. With the title “How good would it be for Russia’s air transport if everything was normal?” You can download his 20-slide presentation below.

TAV-operated Tbilisi Airport serving the capital of Georgia (with which Russia was at war in 2008) celebrated the launch of Aeroflot’s new daily service from Moscow Sheremetyevo last October. Despite the current crisis, Ukrainian traffic is also up substantially, although the picture is complicated as many agencies and groups – such as OAG – define Crimea’s growing traffic base as part of Ukraine.