The restructuring plan recently presented by the national carrier has an air of déjà vu about it Ukraine International Airlines (UIA)which took effect in November. The country's main airline is at the end of its tether, and its new chairman, Evgeny Dykhne, announced at the end of October that he would be forced to sell the company. reduce flights and remodelling your network 2019 will be the third consecutive year of losses for the company. In 2018, the carrier's net profitability was fell by 9%. UIA has not paid dividends to its shareholders since 2010.
Several factors explain this downward spiral. " The airline cannot operate to its full potential in Ukraine, due to the low purchasing power of local travellers. The domestic market accounts for only 35% of UIA's sales, compared with 60% to 65% for other airlines".said Aron Maiberg, co-owner of Ukraine International Airlines and member of the shareholders' supervisory board, recently to local media.
additional fuel costs of US$216 million
Added to this is the fact that the company is banned from flying over theRussian airspaceforcing it to make major changes. detours - particularly on traffic to Asia. According to Aron Maiberg, the closure of Russian airspace to Ukrainian-registered aircraft has resulted in enormous costs for the airlines. additional costs. " We are now spending an additional 12,000 dollars for the flight from Kiev to Almaty, 17,000 dollars for the flight from Almaty to Kiev and 17,000 dollars for the flight from Kiev to Almaty. Astana5,000 for Baku and 7,000 to 10,000 $ on Bangkok depending on the type of applianceexplained the company's co-owner. " In four years, this has resulted in additional fuel costs of US$216 million" .
With no subsidy from the Ukrainian government, UIA has had to take the bull by the horns by closing its loss-making lines and applying a drastic restructuring plan of its network. These measures effectively condemn the Kiev hubAlthough secondary, it had nevertheless found its place on the Europe-Asia axis and between Western and Eastern Europe.
This November, Ukraine International Airlines will cease operations to Amman, Minsk and Riga, followed by Krakow in the spring. The Kiev hub will now have only one wave of departures and arrivals each day, with all the consequences that this can have for passengers in the event of unforeseen circumstances. Only Vilnius, London and the other major Ukrainian cities are still served twice a day, while flights to BrusselsYerevan, Paris CDGStockholm, Warsaw and Vienna have been served by a single daily frequency since 16 November. The airline has also suspended its daily flight to Beijing and is preparing to do the same to Bangkok at the end of March, having already reduced the total number of weekly frequencies to Thailand from six to three. These cancellations follow the discontinuation of flights to Colombo, Baku and Almaty. As a result, the airline has seen its share of transit passengers at Kiev airport fall from 28 to 23% in less than a year.
These changes should remain in force as long as the Ukrainian government does not step up to the plate to find solutions to support its national airline. It is not certain that this disguised blackmail will succeed, as Ukraine is in a delicate economic situation.
