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Aeroflot Group Second Highest Operating Margin Among Legacy European Carriers in 2015

March 14, 2016 Aviation No Comments Email Email

Aeroflot Group reported the second-highest operating margin among legacy European airline groups in 2015, with an operating margin of 10.6% on operating profit of RUB 44,107 million.

Also for 2015, Aeroflot Group’s flagship airline, Aeroflot – Russian Airlines, was the fifth-largest airline in Europeby Revenue Passenger Kilometers (RPKs), the industry’s main measure of passenger traffic. Aeroflot – Russian Airlines’ RPKs increased 10.4% in 2015, more than twice as fast as the European average of 5.1%, according to Airline Business magazine.

Aeroflot’s rise in the European rankings comes despite a challenging economic environment for Russia, with the economy in recession and real wages and consumer spending down markedly.

The Group is succeeding thanks to a multi-brand strategy that allows it to capture business across all market segments, a reputation for safety and customer service excellence and the retreat of international and domestic peers.

Among listed European legacy airlines, Aeroflot Group’s 10.6% operating margin placed it behind only Icelandair, and ahead of British Airways parent IAG, according to authoritative industry research group CAPA Centre for Aviation. These three airlines were the only legacy European carriers to post double-digit operating margins for the year.

Noting Aeroflot Group’s Strategy 2025 ambitions to be among the world’s top 20 airlines and Europe’s top five by 2025, based on RPKs and revenue CAPA noted, “Aeroflot is well placed to achieve long term goals.”

The biggest contributor to Aeroflot Group’s 13% rise in passenger numbers was its low cost subsidiary Pobeda, which launched in late 2014. Pobeda delivered 2015 traffic of 3.1 million passengers, mainly in the domestic market, while the airline has also recently launched its first international routes from Moscow to Cologne/Bonn,Bratislava, Memmingen and Milan.

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