Russia stands on the cusp of change

Infrastructure development and regional route liberalisation could lead to a new direction for the civil aviation sector

Competition at Russia's two main hub airports, state-owned Sheremetyevo and privatised Domodedovo, remains as fierce as ever as they vie for dominance of the crowded Moscow market. Both make claims and counter-claims about their passenger growth rates, international business and popularity with airlines.

Sheremetyevo set two recent records for daily traffic; on 14 September, there were 726 take-offs and landings, and on 16 September the airport served more than 100,000 passengers for the first time in its history. The Aeroflot hub also increased its passenger numbers by 17.1% to 17.4 million between January and August 2012, while international passenger traffic grew by 19% to 11.5 million.

By the end of August 2012, Domodedovo's passenger growth in 2012 was slower at 9.1% to 18.7 million, of which 11.1 million were international, a rise of 5.9%. On some routes, such as those to Dubai, Barcelona, Burgas, Kiev, and Minsk, traffic growth rose by 38.6%.

While Sheremetyevo is catching up with Domodedovo, the latter remains the main Russian airport for passenger traffic and continues to benefit from its Star Alliance and Oneworld connections (key Domodedovo partner S7 is a member of the latter alliance). There is also a focus on building solid transfer passenger traffic from cities, such as St Petersburg, Krasnodar and Yekaterinburg.

Transfer test

Domodedovo is piloting a project for transfer passengers and their luggage arriving by international flights and going on to Russian domestic routes. It is being implemented through the Interdepartmental Commission of the Federal Customs Service and the Ministry of Transport of Russia and aims to optimise connection times of flights and to maximise transfer destinations. Technology designed to eliminate a second customs and baggage screening procedure will be tested until 1 June 2013.

Like many aspects of the Russian market, it is unclear how the Moscow airport rivalry will develop. The Moscow airport system, which also includes the smaller airport of Vnukovo, is undergoing change to deal with congestion issues. The government plans to merge the operations and management of Sheremetyevo and Vnukovo under a single entity could possibly give Aeroflot and its Skyteam partners the run of Sheremetyevo with other airlines using Vnukovo.

Sheremetyevo officials declined to comment on this project, saying that they had "no details of final decisions". The merger is expected to be completed by the end of 2012 and is meant to improve synergies in terms of allocating available resources and increasing the efficiency of the operational process.

For example, two intersecting runways are available at Vnukovo. Their combined capacity of 45 aircraft movements per hour could be used more effectively across the Moscow system, although a third runway at Sheremetyevo is planned for 2015. Other infrastructure plans at Sheremetyevo include a new cargo terminal, a railway to the northern terminals by 2014, and a new terminal to replace Terminal B by 2016.

There has been speculation that the government would ideally have liked each Moscow airport to operate as a hub for one of the three alliances. From an airline perspective, some separation of function would have been welcomed, though not necessarily in this format.

Specialist roles in Moscow

Dmitry Stolyarov, the first deputy general director of Transaero Airlines (a key tenant airline at Domodedovo), told IHS Jane's: "It would have been better if Moscow's airports had initially made a common decision to specialise in different areas of business. Thus, in Sheremetyevo charter and cargo operations together with point-to-point flights could have been developed; Vnukovo could have become home to business and VIP services including the transportation of heads of state and other governmental authorities; while Domodedovo would provide transfer facilities for those travelling between East and West, becoming a large international hub. However, the three Moscow airports have chosen another way, evolving every aspect of service and [thus] competing with each other."