“How good would it be for ’s air transport if everything was normal?”

Paul Hogan Publisher anna.aero www.anna.aero commercial break

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• We invented Cake of the Week Good and Bad News: Traffic is up and down in & Russia

Traffic about 7% down*

Russia's main airports: 2015 v 2014 Passenger percentage change 2014 Pax Jan Feb Mar Apr May Jun Jul Moscow Domodedovo 33 039 531 -5.7% -13.7% -10.3% -10.3% -2.0% -6.1% Moscow Sheremetyevo 31 567 974 2.4% -0.3% -4.4% -3.7% -1.4% 1.6% St Petersburg 14 264 732 4.4% -2.5% -1.7% -5.7% -4.2% -8.3% -4.4% Moscow Vnukovo 12 733 000 15.9% 24.1% 30.3% 32.7% 34.5% 24.3% Ekaterinburg 4 481 569 -10.4% -15.3% -15.1% -10.3% Novosibirsk 3 957 667 -8.7% -13.7% -11.6% -12.6% -2.8% -4.8%

*excluding Vnukovo due to ’s Pobeda LCC extraordinary growth What’s happening to Russia’s traffic? anna.aero’s Rosaviatsia spy tells us!!!

• Russian airlines carried 52.5 million pax +3%

• First-half international traffic was down 13.8%

• Domestic traffic grew 14.6% to 29.21 million

• Aeroflot 14.6 million passengers, up 9.8%

• 7.5 million, up 2.7%

• 4.5 million, up 0.5

• carried 3.1 million, down 38.9% Bad and Good News: Moscow's top 15 country markets Seat capacity change 2015 v 2013

-40% -20% 0% 20% 40% 60%

Russia 15.4% Ukraine 33.0% Germany -22.4% Turkey 13.6% China 9.9% Tajikistan 16.0% Uzbekistan -17.8% Italy -14.5% Kazakhstan 13.6% Armenia 1.5% Spain -13.5% UAE -11.0% Kyrgyzstan 9.8% Egypt 49.5% France -18.1%

UK is also down -21% (Europe's five major economies have capacity cuts compared to two years ago. Need for re-invention of strategy for Russian market in order to gain growth. Hub capacity to UAE is also down. Bad and Good News: DME's top 15 country markets up and down Capacity change 2015 v 2013 -60% -40% -20% 0% 20% 40% 60%

Russia 10.6% 59.3% Ukraine 47.2% Germany -31.8% Tajikistan 47.9% Moldova 50.4% Uzbekistan -23.0% UAE -11.2% Kyrgyzstan 24.5% Spain -45.7% Armenia -10.9% 99.8% UK -42.1% Egypt 46.4% Belarus 32.9% Azerbaijan -13.3% Switzerland -10.2% Good News: Russian connections to CIS and EEU improving Capacity change 2015 v 2013

-30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70%

Tajikistan 16.0%

Uzbekistan -17.8%

Kazakhstan 13.6%

Kyrgyzstan 9.8%

Georgia 52.0%

Turkmenistan 67.1% More bad news from the West: Latest route droppings

• Lufthansa drops Frankfurt:

• Moscow VKO • Nizhny Novgorod • Samara

• easyJet drops Manchester:

• Moscow Domodedovo Surprise: traffic to Crimea is up Top 5 Russian airports and capacity change (since 2013) 0% 500% 1000% 1500% 2000% 2500%

Moscow Domodedovo 2133%

Moscow Sheremetyevo 937%

St Petersburg Pulkovo 874%

Moscow Vnukovo 359%

Ekaterinburg 155%

Novosibirsk 383%

Overall in the past two years capacity to Crimea has risen 423% with 39 new Russian connections being added from Simferopol. DME number one market. Moscow could be a mega-hub if there was…just a bit of liberalisation

The case of Moscow Domodedovo (DME) Let’s go back to the Russian Revolution (1991) British Airways Moscow DME plan for Air Russia Moscow Hub vs. Helsinki’s Euro-Asia Hub

• Moscow population over 11 million

• 5 million foreign tourists visited Moscow in 2012

• 3.3 million (including home tourists) in Helsinki

• 33 million passengers at DME in 2014

• 16 million at Helsinki made possible by Trans Siberian routes

Russia key industrial concern:

Oil, gas, 2nd biggest arms producer, born again aerospace, vodka Moscow is more like Istanbul

• Both mega cities of 11-17 million • Equivalent geographical advantages • Mixed hub of transfer and O&D • Mixed operation of 737/787/bigger types • Star Alliance position vacant! • Potentially brilliant economies • Both outside EU Moscow’s advantage over MEB3 hubs – 2,800km shorter Euro-Asia sectors!

Science bit: (CDG-DXB-PEK = 11,009KM) (CDG-DME-PEK = 8,300KM)

Distance shortened by 2,799KM

2,494 KM 5,806 KM

5,252 KM 5,847 KM You can reach Delhi from Moscow on a 737-900 787 can reach North and Central America and as far down as Rio +4 million pax European Airports with no MEB3 carrier

Russian carriers versus Turkish Airlines

• Liverpool • Palma • Bristol • Hannover • Belfast • Stuttgart • London Luton • Thessaloniki • London Stansted • Bilbao • Marseille • Malaga • Toulouse • Alicante • Valencia • Basel • Bergen • Cologne Bonn • Porto • East Midlands • Naples • Gothenburg • Pisa • Helsinki • Riga Summary operational advantages DME hub

• Access to all-Europe, Middle East, North Africa and Central Asia republics with single-aisle aircraft

• Multiple niche markets can be more lucrative – competing with Turkish Airlines

• Reach everywhere except Australia to the East (DME no China connections!)

• All of North and Central America as far as Rio

• DME has two parallel runways and is the easiest Moscow airport to expand. BE MORE LIKE TURKEY OPEN RUSSIA A BIT! TURKEY KEEPS ONE-SIDED ADVANTAGES!! • Turkey 165 million pax in 2014 with +10% growth every year (90 million in Russia – based on major airport sample)

• Istanbul Ataturk approaching 70 million – overtaking Frankfurt this year

• Building a Istanbul New Airport mega hub for 150 million passengers

• Turkey 70 million pop – Russia 143 million – twice as big – 250 air transport million market – if “Normal” Learn about the new breed of mega hub: Istanbul New Airport Development Conference