Aviation LeasingHarnessing the growth potential of the aviation sector in the CIS will require a series of reforms starting from within the industry. Indeed, since the advent of market liberalisation in the region, the industry has undergone something of an all-embracing transformation as it looks to the west to modernise its operations and replace its aging fleets of soviet-era aircraft. Consistent with trends of recent years, air traffic in the CIS is predicted to grow by over 6 percent year-on-year until 2026, outstripping the world’s average rate of growth forecast for the same period. Tapping this potential and securing a stable and globally competitive industry for the region will be a formidable task, but the experts at AviationCV ask the question: what solutions can outsourced recruitment and aircraft wet-leasing offer for aviation in the region?

The current state of air transport in the CIS evokes that of Europe twenty years ago, when deregulation was beginning to take a foothold in the industry. Several unique problems still persist however, including the need for consolidation of the disproportionate number of small regional carriers that sprung up since the collapse of the Soviet Union (115 or so in Russia alone). The problems presented by this are both economic market inefficiencies and the poor regulatory oversight accorded to such as extensive number of airlines, resulting in the region’s appalling safety record at three times the average global number of air accidents.

In addition, pilot training constraints surround the transition from Russian-built aircraft to western jetliners. While just ten years ago the ratio of Russian/western aircraft was 19 to 1, this has drastically altered with almost two western jetliners for every Russian aircraft in operation. This has fostered a dilemma, as the region’s aviation market remains highly fragmented with more than 45 different types of aircraft in service at any given time. In relation to this, the CEO of AviationCV.com, Skaiste Knyzaite, states that, ‘Market fragmentation combined with both a region-wide shortfall in pilot trainee output and the fact that the CIS is projected to need a further 11,900 pilots by 2032 creates very serious ramifications for the future of the region’s airline industry.’

‘Addressing this concern will take a concerted effort beyond the resources allocated to the CIS region. The fundamental issue is that at present the CIS lacks the capital or otherwise infrastructural capabilities to sustain the heightened demand for air travel that we are witnessing. In countries such as Kazakhstan where air travel has grown by a staggering 22 percent over the last year, many young air carriers are finding that the optimal strategies for success lie abroad. Specifically, by wet leasing aircraft, airlines are able to acquire the personnel so evidently needed, to commence new routes or strengthen their existing network, respond to rapidly changing market conditions in the country as well as to test the suitability of a certain aircraft type without the large financial outlay that comes with a normal lease or purchase order,’ comments Skaiste Knyzaite, CEO of AviationCV.com

S. Knyzaite admits that crucially infrastructure improvements are needed to ensure the long-term success and competitiveness of the region’s aviation sector. For the interim however, established carriers in the CIS may take advantage of the services of aviation leasing agencies to build a reliable flight crew and maintenance personnel base, while maintaining full control of their own aircraft. Indeed, with the shape of the industry nowadays, the higher than normal success of low cost carriers is largely down to their tendency to outsource crew, affording flexible fleet and route network formation. Although an open skies market for the CIS is a little further down the track, with liberalisation encroaching on evermore markets low cost carriers and revised business models are bound to see a rise in the upcoming years.

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