New Moscow airport's take off stalled by vanishing passengers

Russian Prime Minister Dmitry Medvedev (right) visits the newly constructed Zhukovsky airport near Moscow, Russia, on May 30, 2016. PHOTO: REUTERS

MOSCOW (Reuters) - Moscow's new international airport is set to open next month with only a handful of airlines and faces a struggle to win passengers from rivals after Russia's economic crisis.

The Zhukovsky airport terminal was inaugurated by Prime Minister Dmitry Medvedev on Monday, part of a 10 billion rouble project to redevelop a cargo airfield and Cold War flight test centre 40km south-east of Moscow.

The airport, a joint venture between state-run investor Rostec and Lithuania's Avia Solutions Group, will host routes from Moscow to cities in the former Soviet Union.

It was conceived at a time when the Russian capital's biggest three airports were regularly operating at maximum capacity and was meant to tap rising airline traffic, then growing 10 percent year-on-year.

But a steep economic downturn fuelled by lower oil prices and Western sanctions over Ukraine has hit the aviation market hard, pushing consumers to tighten their belts.

The empty terminal, spanning 17,600 sq m with 18 registration desks, two cafes and a medium-sized duty free shop, has an operating capacity of two million passengers a year.

The airport's total capacity is set to rise to 12 million passengers by 2020, Rostec said, but so far it has only reached operating agreements with four airlines Just two of those, Air Kyrgyzstan and Kazakhstan's SCAT Airlines, carry passengers and will operate around 20 flights a week, Rostec said.

Assuming 150 passengers on each plane, that means Zhukovsky's traffic could total just 156,000 passengers a year, well below its two million capacity.

Passenger numbers in Russia fell 4 percent last year and are seen falling 5 per cent in 2016.

"Today the existing airports are sufficiently freed up to be able to provide the required slots," said Mr Alexander Burtin, commercial director of Russia's Tez Tour tourism agency. "A couple of years ago there was more demand when the first stone was laid. (But) now the situation has been complicated by economic conditions."

More than 20 airlines quit the Russian market in 2015 and traffic at Moscow's Domodedovo airport, previously the capital's largest air hub, fell by 3 million passengers to 30.5 million.

Zhukovsky will have to compete with Domodedovo as well as Moscow's Sheremetyevo and Vnukovo airports, whose 2015 passenger numbers totalled 31.3 million and 15.8 million respectively.

While its rivals are served by dedicated rail services from central Moscow, the new terminal is only accessible by roads frequently choked with traffic jams. That has cost it potentially lucrative new customers such as low cost airline Pobeda, operated by state flag carrier Aeroflot.

"As a secondary airport, (Zhukovsky) could be interesting for Pobeda," said an Aeroflot spokesman. "But in order to consider this possibility, the airport's access infrastructure needs to be secured."

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