The Russian aviation industry has experienced solid growth in the last five-year period. 2017 was a decisive year when a growth rate of 37.8 percent was achieved. Due to the COVID-19 pandemic, the industry is anticipated to contract by 49.2 percent in 2020. However, the sector is expected to grow strongly over the next five years.

In recent years, the Russian aviation industry has been driven primarily by the international flights segment, which grew enormously until 2015. The slowdown in 2016 caused a significant drop in the value of the industry, which can be attributed to the depreciation of the ruble and the economic slowdown, which weakened demand for international flights. Another negative factor is the sanctions imposed against Russia.

The Russian aviation industry generated total revenues of USD15.4 billion in 2019, which equates to an average annual growth rate (CAGR) of 9.5 percent between 2015 and 2019.

Russia is the largest nation in the world, and therefore there are many airports in the country. Russia currently has 227 airports that are registered by the Federal Air Transport Agency.

With a CAGR of 7.4 percent, consumption rose between 2015 and 2019 to a total of 102.2 million passengers in 2019. By the end of 2024, the industry is expected to have reached 109.8 million passengers, which corresponds to a CAGR of 1.4 percent for the period of years from 2019 to 2024.

Given its vastness, Russia remains an underrated tourist destination. With a low population density and vast, uninhabited territories, Russia is perfect for visitors who want to escape and explore. As an example, tourists can visit remote places like the Kuril Islands, an almost untouched place. Chinese, German, and South Korean visitors have helped increase visitor numbers in recent years. Russia has introduced visa-free travel for Chinese groups to further increase the number of visitors. It has also hired more Mandarin-speaking staff at airports to improve the travel experience.

Internationally, the Russian aviation industry recorded the highest volume of 53.2 million passengers in 2019, representing 52 percent of the industry’s total volume. By way of comparison, domestic traffic in 2019 was 49.1 million passengers, representing 48 percent of the industry’s total.

In 2018, tourism was boosted by the successful 2018 World Cup, which attracted tourists from all over the world and boosted the strong growth of airlines. Russian tourism experienced a boom in 2018 when over five million tourists visited the World Cup, which took place over the course of an entire month in eleven different cities in Russia. The tournament not only boosted tourism but also helped attract more foreign visitors to Russia in general.

The industry’s output is expected to decelerate, with an anticipated CAGR of 0.3 percent for the five-year period from 2019 to 2024, expected to push the industry to USD15.6 billion by the end of 2024.

The deadly COVID-19 outbreak in 2019 has already had a significant impact. Due to travel restrictions and lockouts, a significant decline in domestic and foreign tourism is expected in 2020, which should lead to a significant decline in the aviation industry. In the second quarter of 2020, Aeroflot’s passenger traffic declined by 88.8 percent. The largest decline occurred in April, when the group carried only 229,000 passengers compared to the normal level of four to five million. The numbers illustrate the impact of the pandemic.

President Putin has promised that by 2021 Russia will offer electronic visas that will be valid for up to 16 days and cost around USD50. Introducing these visas will contribute to long-term volume growth. Moreover, the renovation of the Novy Urengoy Airport in the Yamal-Nenets autonomous district is expected to be completed by 2021, which will help increase the country’s flight capacity.