Code sharing from Ekaterinburg to Moscow

Published: 4/24/2000

On the 11th April Transaero signed code-sharing agreement with Ural Airlines. The company"s press service reported that the two companies decided jointly operate Moscow-Ekaterinburg flight. The first flight is expected on 15th –16th May by Ural Airlines" Tu-154. According to Transaero they chose Ural Airlines because of the company"s service and safety meets Transaero"s standards. For Transaero the agreement should improve their performance on the route, which has a number of carriers, and is currently highly competitive according to the airline. According to a source at the airline," Why should we (Transaero and Ural Airlines) compete with each other, having flights almost at the same time, carrying empty aircraft and bearing losses. Therefore we decided to sign code-sharing agreement." For Transaero optimising capacity, rather than traffic growth appears to primarily motivate the code-sharing agreement, but Transaero believes that the two airlines together are a serious competitor for other carriers on the route. Transaero said that share of revenues from routes operated under code-share agreements depends on the respective carrier"s costs suggesting that Ural with its higher costs will take a greater share. Transaero hopes to gain additional traffic for its international flights and the timings of the code share flights will be coordinated with their international departures from Moscow. Transaero has other code sharing agreement with other Russian airlines. In February 1999 Transaero signed similar agreement with KrasAir. The jointly operated routes Moscow-Krasnoyarsk, Moscow-Vladivostok, Moscow-Norilsk the two companies carried more than 300,000 passengers in 1999. At the end of 1999 Transaero signed code-sharing agreement with Air Kazakhstan. The agreement started in March 2000 its success is therefore difficult to assess at this point. In March 2000 Transaero also signed a cooperation agreement although not a full code sharing agreement, with Continental Airlines. The primary reason for the lack of a code sharing agreement remains, as it has for a number of years, US unhappiness about access to the Russian market for US operators. The two airlines will use their route networks, joint ticket sales under coordinated fares. For Transaero, 2000 is bringing reasonable business, they remain however cautious of prospects in what they see as being a volatile market influenced by factors beyond their control. The airline reportedly made an operating profit of $5.1m in 1999, which was the strongest result for a number of years and a figure that was reported to have surprised the airline"s management. While not taking on any new aircraft in 1999,Transaero signed an agreement in 1999 with the Ilyushin Finance Company for the financial leasing of 10 Tu-204-100 with Ps-90A engines for over $150m and hopes to take delivery of the first aircraft in 2001.

Article ID: 1578