.jpg)
The potential collapse of Transaero, Russia’s second biggest airline, will have a “minimal” impact on Cyprus, as only 30,000 are scheduled to arrive on the island until the end of the year, with 350,000 already carried this year, Transport Minister Marios Demetriades said on Friday.
Trasaero is the primary carrier to Cyprus for BiblioGlobus, the tour operator that accounts for 70% of all Russian arrivals on the island. Rival state-controlled Aeroflot, with whom takeover talks failed on Thursday, will probably take over this added traffic, until a second scheduled airline is designated in accordance with bilateral treaties between the two countries.
Association of Cyprus Travel Agents (ACTA) chairman Dinos Kakkouras said on Friday that Transaero flights are continuing as normal, also confirmed by Adamos Aspris, spokesman for airports operator Hermes.
“We are waiting to see how the Russian government will handle the development and we are waiting to be briefed by tour operators about what happens next,” Kakouras said.
Some 40 weekly Transaero flights between 18 Russian regional airports and Cyprus are carried out every week, with Russian now accounting for the second biggest tourism market of the 2.5 mln arrivals, following the U.K.’s 1 mln tourists.
Despite the economic crisis in Russia, due to sanctions and spiralling inflation hurting consumer spending, Russian airlines carried 63.9 mln passengers during the first eight months of the year, up 0.4% year-on-year, while in August passenger numbers grew 2.3% to 11.5 mln, continuing a trend of the previous months.
International traffic was down 13.6% compared to a year ago to 28.2 mln, according to Russia’s Federal Air Transport Agency.
In January-August, Aeroflot carried 17.3 mln, up 10.2% y-o-y, Transaero carried 9.4 mln, up 3.6% y-o-y, Saint Petersburg-based Rossiya, an Aeroflot Group member, carried 3.4 mln, down 0.9% y-o-y, S7 Airlines carried 5.5 mln, up 1% y-o-y, while Globus Airline, a member of S7 Group, carried 1.6 mln passengers, up 18.9%. UTair carried 3.8 mln, down 38.7% y-o-y.
All these carriers fly to Larnaca and Paphos, but have not clearly expressed a desire to take over Transaero’s capacity.
On Thursday, Aeroflot dropped its offer for a controlling stake of just over 75% of Transaero. It said that Transaero didn’t submit a formal proposal for the deal by the agreed deadline and that its board of directors wouldn’t extend the deadline for talks.
The government-brokered deal was aimed at staving off bankruptcy at the heavily indebted Transaero, which has curtailed aircraft purchase deals to save money.
The collapse of talks could have ramifications beyond Russia as Transaero is a buyer of Boeing and Airbus jetliners.
Airbus had already delayed delivery to Transaero of the first of the carrier’s A380 superjumbos, originally due this year, because of weakness in the Russian airline sector. Transaero had ordered four A380s. Airbus has been struggling to sell A380s which retail for more than $400 mln at list price, though customers typically get discounts.
The airline also had orders four Boeing 747-8 jumbo jets, which remain to be delivered.
The acquisition of Transaero would have bolstered the Aeroflot Group’s share of Russia’s airline market beyond 50%, according to the Wall Street Journal. The management of Russia’s dominant airline was apprehensive about the deal, though, because of Transaero’s financial situation, Russian airline experts have said.
Aeroflot Chief Executive Vitaly Saveliev said Aeroflot would ensure Transaero passengers won’t be impacted by the collapse of talks. “Passengers will be guaranteed transportation or a refund in the event that a flight is cancelled,” he said. Aeroflot effectively took over operational control of Transaero already last month.
Founded in 1990, Transaero had a fleet of 97 airplanes and an outstanding debt of 67.5 bln roubles ($1.03 bln) at the end of the first half of 2015. Herman Gref, head of Russian lender Sberbank, which lent money to Transaero, said earlier this year that the company’s debt issue was “serious.”
Cyprus Energy and Tourism Minister Yiorgos Lakkotrypis said that a probable bankruptcy of Transaero is a negative development and that officials were looking to assess how this development could affect tourists already vacationing in Cyprus as well as how it would affect tour operators in the months ahead.
Cyprus Tourism Organisation Deputy Director Annita Demetriadou said that she expects no disruptions in October, in which more arrivals are expected compared to November and December.
Transport Minister Marios Demetriades said that a probable failure of Transaero could create a gap in Cyprus’s connectivity to Russia affecting the tourism industry.
