Aeroflot to launch its own low cost airline in 2014

Yesterday, Russian national carrier’s Board of Directors confirmed the plans to establish a fully owned low cost subsidiary. According to plans, the carrier will start its activity in 2014.

Services provided by the new subsidiary will be fully different from the ones of Aeroflot. Cost-effective business model, as well as the rejection of a number of amenities, considered insignificant by many passengers, will make it possible to achieve 20-40% discount comparing to traditional carriers and even to compete with the prices of the rail transport.

Aeroflot anticipates that the low-cost subsidiary will start its activities in 2014. During the first two years the carrier will develop only the most profitable routes in the European part of Russia, followed by expansion to other Russian regions and abroad, including the CIS countries. It is planned to develop an independent and simple organizational structure, capable of providing necessary speed of reaction to rapidly changing market conditions.

According to Lenta.ru, with reference to Kommersant, Aeroflot will have to wait for certain changes in the Russian legislation in order to successfully implement such a project. The latter will have to include the authorization to sell non-refundable tickets, hire foreign pilots, drop compulsory in-flight catering, etc.