23 Apr 2020 12:45

S7 owner Filyov believes international air travel will resume in a year

MOSCOW. April 23 (Interfax) - Chairman of the Board of Directors of S7 Group Vladislav Filyov believes that international air travel, which has been suspended due to the coronavirus pandemic, will not resume until April next year.

"The point of the measures taken by the government is to draw out the peak of infections so that the health service has enough resources to support those in a bad condition. The self-isolation measures will lead to a small number of people getting sick, we won't get herd immunity, so a second wave of the epidemic can be anticipated, and the second wave will summon just the same actions from the state," Filyov said in an interview with the Kommersant newspaper.

"I believe more in history: even the Spanish flu had two waves, and the second wave was worse than the first. Therefore, I think that international aviation will start to recover in a year," he said.

Passenger flow of Russian companies will approximately halve at the end of the crisis, from 120 million to 60 million passengers per year, Filyov said. At the same time, the big players, apart from Aeroflot , such as S7, Utair, and Ural Airlines "with a high level of probability have chances of sticking around in one form or another," he said.

"How big these airlines will be is another matter. I'll remind you that in 2008, before the global financial crisis, our fleet comprised 80 planes, and after it - 38. Transaero shrank from several dozen planes to, I think, seven after the crisis in 1998. In 2013, it already had 100 planes. With seven planes the company survived, but with 100 it didn't. Why? Because airlines never die from having too few planes but always from having too many. They never die from lack of profit, either. They die when their cash runs out and they stop filling up," Filyov said.

Asked how much money the state would need to maintain the current level of air travel, Filyov said "around $5 billion in all, or 350-400 billion rubles." At the same time, he said the likelihood of this was "close to zero."