newstodate.aero
Jul 7, 2006 (newstodate): The on-going fuel price hike hits hard at not least Russian airlines.
Announcing its latest annual report 2005, Russian airline S7, Siberia Airlines, showed an increase in revenues by 30.4 percent, but operational costs increased by 39.4 percent, y-o-y.
The steep increase in costs are mainly attributed to Russian fuel prices rising by 44 percent over 2004, but also to the costs involved in operating Soviet-built aircraft that are significantly less economic on fuel than western counterparts.
Also S7 complains the lack of fuel hedging instruments in Russia.
The way out, according to S7, is replacing Russian aircraft with a fleet of western aircraft.
But again the Russian airlines are severely restricted by the high import taxes levied on western aircraft, close to 50 percent of the sales value.
Over the last year, S7 has taken in eight Boeing 737-500 and four Airbus A310 on lease contracts, which has had a positive impact on the airline's management of fuel costs.
Announcing its latest annual report 2005, Russian airline S7, Siberia Airlines, showed an increase in revenues by 30.4 percent, but operational costs increased by 39.4 percent, y-o-y.
The steep increase in costs are mainly attributed to Russian fuel prices rising by 44 percent over 2004, but also to the costs involved in operating Soviet-built aircraft that are significantly less economic on fuel than western counterparts.
Also S7 complains the lack of fuel hedging instruments in Russia.
The way out, according to S7, is replacing Russian aircraft with a fleet of western aircraft.
But again the Russian airlines are severely restricted by the high import taxes levied on western aircraft, close to 50 percent of the sales value.
Over the last year, S7 has taken in eight Boeing 737-500 and four Airbus A310 on lease contracts, which has had a positive impact on the airline's management of fuel costs.