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Russians Explore Business Aviation Growth Possibilities

 - November 11, 2019, 2:00 AM
Pavel Kolobkov, Russia's minister of sport and tourism and one of the main proponents of the development of business aviation in Russia.

The Russian market for business aviation is on the verge of big changes, according to recent statements from leading Russian experts in the field and senior officials of the Russian Ministry of Sport and Tourism. These will be driven mainly by shifting preferences of local customers towards economy and functionality, they say.

Mikhail Titov is a vice president of the Russian United National Association of Business Aviation (ONADA)—a public association, which unites leading operators in the field of business aviation. He said recently that the market is becoming more civilized, while local customers are becoming more pragmatic.

He sees these trends reflected by the ever-growing interest of local customers in small- and medium-size business jets. Titov said that was generally uncommon for Russians in the past, and he views it as a clear sign of rapidly-changing customer preferences.

Pavel Kolobkov, Russia’s Minister of Sport and Tourism, commented that many potential Russian customers in recent years have started paying more attention to "the technical component of an aircraft, the level of its fuel consumption and crew aboard," instead of the brand and various frills.

The ongoing change in customer preferences has also contributed to growth in demand for domestic jets. One of them is Sukhoi SuperJet VIP, an aircraft built by Russia's Sukhoi corporation. Growing interest from potential customers has already forced Sukhoi to consider an increase in production.

In the meantime, analysts told AIN they have also noticed growing interest from local customers in chartering jets, instead of purchasing.

According to these analysts, the cost of charter varies (by type of the aircraft and destination) from $9,000 to $10,000 per flight hour for the bigger jets and most popular destinations, to $2,000 to $3,000 per flight hour for smaller models.

In the meantime, according to Titov, despite the improved economic situation in Russia, the current market remains unstable. Analysts at ONADA predict growth in registrations of business jets owned by Russians and operated under domestic jurisdiction. That will also be part of a bigger trend for wealthy Russians returning their capital and fortunes to Russia, amid fears of new personal sanctions from the West.