A New Far-Eastern Russian Regional Airline & Aircraft To Arrive In March 2021
Op/Ed by Chris Devonshire-Ellis
The development of the Russian Far East is continuing with aircraft manufacturers gearing up to supply a new, as yet unnamed Russian Far East regional airline. The region has been sporadically served since the Stalin era, however global warming, improved technologies and the development of the Russian Arctic and Northern Sea Passage between Asia and Europe is hastening the need for regular air services.
The Far Eastern Federal District is the largest of the eight federal districts of Russia but also the least populated, with a population of 8,371,257 (75.5% urban). The area lies within the easternmost part of Asia, and contains 11 specific regions with 14 cities with populations in excess of 75,000. The Regional Governments are currently discussing the establishment of a new airline and their respective investments and shareholdings within it. A decision is expected in mid-March.
A report issued by a current regional airline, Aurora Air, suggests that air transportation in the Far Eastern Federal District over the next five years will require about 70 new aircraft. The report says that three segments of air transportation remain problematic in the Far East: local, regional and interregional. The coefficient of aviation mobility, which characterizes the average number of air flights made by one resident per year, in these segments in the Far Eastern Federal District is only 0.35. However, by 2025, it should reach the average Russian level of 0.72. That means that in the next four years, the Russian Far East will need facilities to fly over 2 million passengers per year.
Local transportation requires aircraft with a capacity of up to 20 people, capable of effectively flying over distances of over 500 km and landing on unpaved runways with a length of 600 to 1000 m.
The report also notes that at present 35, 19-seat aircraft are operated on local airlines in the Far Eastern Federal District: ten Canadian DHC-6 Twin Otters and two dozen Czech L-410s. About 100 aircraft are operated on regional and interregional routes, of which 80% are outdated. The remaining 20% are Superjet 100 and Canadian Bombardier (70-seat DHC 8 -Q400 and 50-seat DHC 8-Q300). Aurora predicts that all obsolete domestic aircraft will be fully withdrawn by the end of 2025.
That has sparked intense interest from Russian small aircraft manufacturers, such as UZGA, who manufacture the L410 turboprop, under licence from the Czech Republic’s Aircraft Industries and who are keen to compete with the Canadian manufacturers currently supplying the region. UZGA are also planning to produce a 9 seat aircraft ‘The Baikal’ at the Russian Helicopters manufacturing plant in Ulan-Ude, across the border from Mongolia. The company believes the Russian Far East may require 230 Baikal aircraft over the next ten years. The first Baikal should have its licensing test flights also in March.
A larger aircraft, the Russian built IL 114 is designed for flights on interregional routes, and is already under development. This aircraft should occupy a niche between the 19-seat L-410, which is already being assembled in Russia, and the 68-seat Il-114-300, which is now undergoing certification. It is this aircraft that plane spotters are likely to see on interregional flights from the Russian Far East to countries such as Mongolia, Northern China and Japan.
The development of the Russian Far East continues apace. This area of North-East Asia has long been under-developed due to Arctic conditions and the Cold War. Now opening up as a conduit for transport of goods between Asia and Europe via the North Sea Passage, that is having a knock-on effect as the route requires services across the Russian Arctic coastline, and the development of regional infrastructure. The Russian Far East is also rich in minerals and other assets. Getting the right quality of aircraft to support the regional needs will change the dynamics of this corner of Asia and lead to longer term development opportunities.
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Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at firstname.lastname@example.org for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.