The economic downturn of 2015 brought about a decline in purchasing power and transport mobility, putting pressure on the Russian transport services market.
The economic downturn of 2015 brought about a decline in purchasing power and transport mobility to increase pressure on the Russian transport services market.
In 2015, the long-distance passenger service market, including domestic and international service, fell 6% to 332.8 billion passenger-kilometres.
Since late 2014, airlines have experienced a decline in passenger numbers on international flights, the key market growth driver over recent years. As a result, airline passenger traffic dropped 6% in 2015. Railway passenger traffic also fell 6%.
The market structure had been changing from year to year but the market share of transport services stayed flat in 2015, judging by key indicators. E.g. in 2015, rail accounted for 26% of international long-distance passenger services, while the share of the air transport stood at 68%.
In contrast, the domestic transport services market saw significant changes. Russian airlines keep refocussing on the domestic market.
This trend pushed up domestic airline passenger traffic by 12% to 49% (+4 p.p. year-on-year), while rail fell 2%.
The annual declines in the market share of the railway transport services suggest strong competition in the transport services market.
Backed by the government, airlines are expanding their domestic presence with subsidised regional flights, cheap non-refundable air tickets, and additional financial support to develop their infrastructure and fleet.
Among the main competitive advantages of airlines are speed and, as a consequence, shorter journey times, no price regulation and better pricing, commercial and marketing flexibility.
Tighter competition is driven by a wider presence of low-costers such as Pobeda Airlines.