Developing fleet
The economic crisis in Russia has affected international traffic, with CIS and foreign carriers experiencing a notable reduction in international demand. Russia's charter airlines and foreign carriers have seen the largest declines. Foreign carriers are, therefore, reassigning capacity to other international markets. Russian carriers are, however, seeing increased domestic demand, lessening the net impact of the economic challenges. According to the Federal Air Transport Agency, for example, Aeroflot's new low-cost carrier subsidiary picked up a healthy demand of 44,000 passengers in its first month of operation. And domestic Russia and Intra-CIS traffic is expected to grow at an annual rate of 3.3 percent, with expansion of low-cost carrier service over the near term driving up demand for single-aisle airplanes.
As the economic situation improves, we expect a return to increased international travel and a requirement in the region for more widebodies. International traffic is expected to grow at an annual rate of 4.2 percent over the next 20 years. CIS airlines will need 760 single-aisle and 200 widebody airplanes to handle the increased traffic. New airplanes will help the region's airlines grow their domestic routes while regaining and increasing their international footprint.
Although the region's fleet continues to grow, 53 percent of new airplane deliveries will replace older airplanes. And because they are more efficient, new airplanes, such as the 737 MAX and the 787 Dreamliner, will improve fleet efficiency.