Russian carrier KD Avia is predicting positive results for its hub at Kaliningrad's Khrabrovo airport

Russia's KD Avia expects its new hub-and-spoke operation with a hub at Kaliningrad will achieve breakeven results this year, despite posting lower than anticipated traffic gains since the hub opened last June. KD Avia had projected its passenger numbers would at least double in 2007 as a result of its new hub at Kaliningrad's Khrabrovo airport. But in 2007 passenger numbers rose only 20% to 700,000.

The carrier says aircraft delivery delays resulted in a capacity shortfall and a worse than expected performance at Kaliningrad, a city on the Baltic Sea which KD Avia is using to connect Russia's hinterland with Europe. KD Avia received three fewer aircraft than planned in the second half of 2007 and the capacity squeeze forced it to abandon one of five routes to Germany, cancel Istanbul services and cut frequencies to Moscow.

Vitaly Golovin

"Our business model is appealing to the market and demand is on the rise"

Vitaly Golovin

Commercial director, KD Avia

But commercial director Vitaly Golovin is confident KD Avia will catch up following the arrival in early 2008 of the three aircraft, which will give it 19 Boeing 737-300s. "Another three to five are due afterwards," he says. "Above all, our business model proves appealing to the market and ­demand is on the rise."

Under the hub-and-spoke scheme KD Avia now operates scheduled flights to 15 European and 13 Russian cities. Golovin predicts traffic will grow to 1.5 to 2 million annual passengers. "This should translate into achieving operational profitability on a per flight basis as soon as in the summer season."

KD Avia's $60 million project at Kaliningrad includes the construction of a new terminal at Khrabrovo airport capable of handling up to 8 million passengers. The first phase was completed in 2007. "Financing comes from bank loans rather than our own resources," Golovin says. "Therefore, we hope to start recouping investment next year and have available funds for fleet renewal." KD Avia is evaluating the 737-700/800 and Airbus A319/320 as longer-range replacements for its 737-300s. It is also considering purchasing widebody aircraft.


Source: Airline Business