S7 Airlines, one of the largest private airlines in Russia, has unveiled the name for its new set low-cost airline as ‘Citrus.’ Citrus’s wholly-owned yet separate entity will commence its flight operation bypassing Moscow and Saint Petersburg mainly in July 2022; 9 months from now. S7 Airlines set up the new low-cost carrier with a view to connect cities of Russia and offer a vibrant and positive travel experience for the passengers. Citrus will offer point-to-point interregional service connections between second and third-tier cities, mainly in central Russia.
Citrus intends to transport about one million passengers during its first year of air service, increasing passenger traffic to between six and seven million from 2024. To handle such passenger numbers, the low-cost carrier will deploy the initial fleet of four Airbus A320neos and enlarge the fleet with the addition of six to eight aircraft annually. The startup has expected to expand its fleet size to 24 airplanes by 2024. The airline has signed a preliminary agreement for its first four A320neo aircraft. Citrus will open ticket booking and sales for upcoming flights next spring.
The growing interest in the regional air travel market has stimulated the airline to tap into the rebounding domestic tourism, top-down from the government.
On the low-cost front, Citrus will provide competition for Pobeda, Aeroflot’s own LCC, which is the largest LCC in Russia’s market. Considered the only true low-cost airline in Russia, Pobeda grew passenger numbers above its 2019 size by 33.1% in April 2021 and retained a 96% share of all budget departure seats on offer this month.
S7 chairperson Tatyana Fileva explained the plans for Citrus to cover the tremendous potential cross-regional transportation segment, which is not possible by S7 Airline‘s current business model.
In the context of the Russian aviation market, the low-cost air transportation service is distributed mainly in Central Russia- Moscow and St. Petersburg. So, there is a need to launch another budget carrier to improve the connection of the regions, as highlighted by the Ministry of Transport of the Russian Federation.
S7 showed the zest to launch a new LCC as Russian aviation is the biggest European market led by LCC Pobeda. The Russian operator S7 branded its LCC ‘Citrus’ from ‘cities of Russia’ as its primary goal is to connect Russian cities. Citrus will serve the regional traffic with its launching in July 2022.
Pink will be the main color for this startup airline, with the aircraft livery about to be displayed in pink. Oleg Beriev, the managing partner of Mildberry branding agency, said that the airline name and pink color is the bold move to attract attention and be friendly. S7 once raised the public eyebrows with light green planes. Still, the emergence of the startup is more necessary than the brand name. S7 will invest up to 3 billion rubles on the project to launch new low-cost airline Citrus with the assumption of the payback period of this LLC project at four years.
With the projection of 24 aircraft and 7.8 million passengers by the end of 2024, the startup is expected to demonstrate its first profit by 2024 end.
Although the global COVID-19 pandemic affected the aviation market severely, the Russian Federation strengthened its domestic market as it bounced back quickly above the 2019 level of capacity and demand to be Europe’s biggest market by weekly seats. The domestic aviation market of Russia was hitless severely by the onset of the pandemic as it recovered rapidly. In fact, Domestic Russia is the world’s strong growing domestic market buoying other countries’ passenger traffic performance. Aeroflot carried more than half-million travelers in April 2021, with its subsidiary Pobeda being the main engine growth for the Aeroflot group. Now, Citrus’ operation will spark low-cost carrier competition in an increased price-sensitive, strengthened Russia’s domestic market.
S7 Airlines is Russia’s largest private aviation holding flying to an extensive network of more than 181 cities in 26 countries worldwide. Being among the top three airlines in Eastern Europe, it operates new, most modern aircraft to offer comfort and convenience to travelers with new generation Airbus A320neo and Airbus A321neo.
Citrus will operate the fleet of Airbus A320 Neos despite the Russian government’s push for airlines to use Russian-built airplanes. As S7 is already a large A320 operator, deploying A320 Neos will be cost-effective and sensible for startup airline Citrus.