Transaero and UTair Announce Partnership Based at Vnukovo

Transaero and UTair, Russia's second and third biggest airlines, announced Tuesday that they were teaming up to combine their strengths on domestic and international routes in a move that could increase competitive pressure on flag carrier and No. 1 airline Aeroflot.

The two airlines signed an agreement to create a strategic partnership aimed to expand both domestic and international passenger and cargo flight operations using combined route networks based out of Vnukovo airport, the companies said in separate statements.

Transaero and UTair plan to work together to improve transit passenger service and sign additional accords, such as an interline agreements, which would mean the companies will accept each other's tickets and will carry each other's passengers on non-competing routes.

UTair boasts the largest domestic flight network and Transaero has strong international presence. By combining routes the companies can create synergy, experts said.

"This means that the two airlines can increase their competitiveness and provide better service to their clients," said Oleg Panteleyev, head of the Aviaport analytics agency.

One other reason for Transaero to up its bet on Vnukovo could be that its primary hub, Domodedovo, is overloaded, which causes occasional flight delays.

The most recent occurrence took place during a four-day period last week. According to the airline, approximately 112 flights were delayed due to problems with getting onboard meals delivered to planes.

Empirical data, such as the ratio of yearly passenger traffic per square meter of airport space suggests that Domodedovo is overloaded, Panteleyev said, adding that Sheremetyevo, which is also used by Transaero, has the same problems.

Transaero started to fly from Vnukovo in April last year and then transferred several of its international flights to Europe and North America there.

But every one of Moscow's airports is important to Transaero, the company said.

"Domodedovo will remain our main airport," airline spokesman Sergei Bykhal said. "Vnukovo will be used as a transit center where the routes from cities across the country and international flights meet. Sheremetyevo airport will be the base for large aircraft, such as Boeing 747, which fly to mass-demand tourist destinations."

From January through May of this year, UTair has carried 3.4 million passengers and Transaero has flown 4.1 million passengers. Aeroflot carried 7.6 million passengers over the same period. All of them saw significant growth of passenger volumes compared to last year's figures. UTair carried 13 percent more passengers versus the first 5 months of last year. Transaero and Aeroflot saw their numbers for the period grow by 27 percent and 20 percent, respectively.

The combined passenger volumes that Transaero and UTair handle already match the numbers carried by Aeroflot, their main rival.

But state-controlled Aeroflot actually welcomes the partnership.

"We support such an alliance. It will improve the quality of competition in the business," a source at Aeroflot told Vedomosti.