Ukraine traffic is booming as Wizz Air looks to introduce low cost services

The latest country to embrace the low-cost airline concept looks likely to be the Ukraine when Wizz Air launches domestic flights from four Ukrainian airports next month, followed by international services from Kiev in mid-September. With aspirations of joining the EU one day and having already won the Eurovision song contest in 2004 this will be a further example of the country’s ‘westernisation’.

After achieving independence in 1991 Ukrainian airports suffered a major downturn in demand. Traffic finally started to pick up again in 2000 and since then throughput at the four busiest airports has almost quadrupled from around two million to almost eight million passengers. Traffic is dominated by Kiev Borispol airport which handles most international flights and acts as a hub for domestic flights.

Image: George Bush welcomed to Kiev Borispol airport. Airport celebrates five-millioneth passenger.
Borispol’s lucky five-millionth passenger presentation (no, not George W. – although he did receive a nice loaf of bread when he stepped off Air Force One in April).
Chart: Ukrainian airport traffic 1998-2007
Source: ICAO

In 2007 traffic at Kiev Borispol (KBP) increased by almost 23% after having grown 18% in 2006. Last year the airport handled around two-thirds of the country’s commercial passengers.

Chart: Kiev Borispol airport seasonality
Source: ICAO

Despite rapid growth in the last two years the airport’s seasonality profile remains remarkably consistent with a summer peak in August and a winter trough in February resulting in a peak month to off-peak month ratio of just over two.

Wizz Air will increase domestic capacity by 20%

Logo: DniproaviaThe leading airlines in the domestic market are currently AeroSvit, Dniproavia, Donbassaero and Ukraine International with over 95% of all flights either starting or finishing their flight at KBP airport.

Airline Frequency Share Capacity Share Number of routes
Aerosvit 44.8% 43.5% 8
Dniproavia 26.5% 21.3% 6
Donbassaero 8.9% 15.3% 2
Ukraine International 8.2% 11.6% 2
Others 11.7% 8.4% 7
Source: OAG Max Online for w/c 16 June 2008
Image: Sir Paul McCartney singing in the Ukrainian rain
Sir Paul McCartney singing in the Ukrainian rain, June 14 2008 in Kiev’s main square. You’ll note we resisted any references to “Back in the USSR” (in which he sang “The Ukraine girls really knock me out.”)

The average aircraft size on Ukrainian domestic flights is 86 seats. The addition of a single 180-seat Wizz Air A320 operating 50 sectors per week will immediately increase scheduled domestic capacity by almost 20% and will make Wizz Air the third largest domestic carrier the day it starts operating. After initially announcing seven domestic routes involving 70 weekly flights Wizz Air has responded to advanced bookings and cut back its initial schedule to just four routes, three from Kiev (to Lviv, Odessa and Simferopol) and one linking Simferopol with Lviv.

48 countries served (including
the USA) by 51 airlines

A total of 48 countries are served by direct scheduled services this summer including the USA (Aerosvit and Delta both fly to New York JFK). The biggest airlines on international routes are Aerosvit (22.4% of capacity), Ukraine International (13.9%), Lufthansa (5.1%) and Turkish Airlines (3.9%). A total of 51 airlines provide international scheduled services to and from Ukraine this summer and Wizz Air will make it 52 when it expects to start international flights to London Luton, Dortmund and Milan Bergamo in mid-September.

Country Frequency Share Capacity Share
Russian Federation 25.6% 26.7%
Germany 8.2% 8.5%
Turkey 5.5% 6.8%
Austria 8.5% 6.1%
Israel 2.9% 3.9%
Source: OAG Max Online 18 June 2008

Airlines that have started international services to the Ukraine in the last 12 months include OnAir (from Pescara), SAS (from Copenhagen), Flybaboo (from Geneva) and Carpatair (from Bucharest and Timisoara).

Image: Russian Federation number one market.
On international services the Russian Federation is clearly the number one market accounting for around a quarter of all flights and seats. Germany, Turkey and Austria are the next biggest markets.

Aerosvit’s traffic is up 23% in the first quarter of 2008

Image: AeroSvit Plane
Great hope: Aerosvit has emerged as the Ukraine’s most important player, recently placing an order for seven 737-800s due for delivery from 2011. The all-Boeing operator’s 767s serve Bangkok, Beijing, Delhi, New York, Shanghai and Toronto.

Aerosvit is the largest airline in Ukraine and is a member of the AEA. It saw traffic numbers increase by over 30% in 2007 to over two million as load factors climbed five percentage points to 73.3%. According to AEA figures in the first quarter of 2008 the airline’s traffic has grown by almost 23% to 359,000 passengers but the average load factor is down almost five percentage points to 66.3%.

Its fleet currently consists of four Boeing 767-300ERs and 13 737s of various types. The 767s, configured with 228 seats, are used to serve longer-haul destinations such as Bangkok, Beijing, Delhi, New York, Shanghai and Toronto. The airline has placed an order for seven 737-800s due for delivery from 2011 and is also considering ordering around 10 smaller aircraft, either from Bombardier or Embraer.

Second ranked Ukraine International Airlines carried 1.44 million passengers in 2007, up 42% on the previous year.


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