S7 Airlines

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S7 Airlines - airline information

General information

S7 is a leading Russian low cost airline that was initially known as Sibir and is even today often referred to as Siberian Airlines or Siberia Airlines (the latter one being its correct former name).

It was founded in 1992 and is already a very important airline, also when compared to others that operate on faraway markets (like easyJet, JetBlue, Ryanair, etc.).

The company started off in 1992 as a subsidiary of Aeroflot, as Tolmachevo Aero Squadron, which has a long history dating back to 1957. In 1992, S7 was born in Ob, not far from Novosibirsk in Siberia, Russia.

The first international route served by S7 was between Novosibirsk, Russia and Frankfurt, Germany in the same year when the company joined IATA, in 1994. At that time, S7 had the name of Siberian Airlines.

The carrier owned by the parent company, S7 Group is based today in Novosibirsk, roughly in the middle of Russia. It connects faraway spots of the country, facilitating travel, bringing low cost alternatives for those who don't want to spend days just to cross from Novosibirsk to Moscow or from Chelyabinsk Irkutsk and so on.

Fact sheet

Destinations

Serving 73 destinations, it is one of Russia's most important carriers.

Among S7's most important destination countries, outside Russia and the CIS:

China

Germany

Israel

Japan

South Korea

Turkey

UAE

Fleet

Interestingly, S7 runs a fleet of mostly US and Airbus airplanes, as presented below in the fact sheet.

S7 has made a contract with Boeing to purchase 15 of the 787 "Dreamliner" model, with 10 further options.

Aging Ilyushin Il-86 and Tupolev Tu-154 are still used in the fleet.

New Tupolev Tu-204SM jets are also expected to enter the fleet. S7 has signed a deal for 15 planes to be delivered between 2009 and 2012. 

Activity & market position

S7 covers a wide area of Russia and connects its major hubs to important foreign destinations as well as internal ones.

This airline is probably the most long-range low cost airline. You can practically travel across continents at very low costs.

S7 has good potential for growth, but it is having difficulties when coping with long distance flight operational costs. Unlike easyJet or Ryanair, this company has to live out of selling cheap tickets to faraway destinations, often flying between continents. Reducing the prices of plane tickets on long distances in not an easy task.

The company also has a subdivision called S7 Charter which operates charter flights to popular holiday destinations.

Further expansion of the fleet, the entry to further internal markets with the extension of the destinations is expected in the years to come.

Expansion through acquisitions

The purchase of Vnukovo Airlines 

In 2001, S7 has purchased Vnukovo Airlines based at Vnukovo International Airport. The purchased carrier was one of Moscow's most important players, with the acquisition, S7 became the second largest carrier in Russia (Aeroflot being the only bigger one).

Acquisition of Chelyabinsk Airlines 

In 2004, S7 bought Chelyabinsk Airlines, afterwards creating one of its main hubs at the Chelyabinsk airport.

Branding strategies

The brand S7 only appeared in 2005, after what the company decided to "rebrand", giving up the old name, better differentiating itself from other carriers and also from itself.

The new brand was a result of the work of a London-based British branding consultancy company, Landor Associates.

Online booking and ticket prices

The company sells airline tickets exclusively over the internet. These have to be purchased at least 30 days before flight.

Periodically, so-called "ultra low fares" are offered during winter, when the number of passengers drops due to the harsh Siberian winter.           

The company has often given up on its special price discounts, changed the levels of taxes, creating insatisfaction among its clients.

Recent tragedies

S7 Airlines has had many accidents in recent years. The most heard-of and most shocking ones were these presented below...

The shoot-down of Siberia Airlines Flight 1812  

A strange incident has made the headlines in October 2001, just after the 2001 September 11th attacks.

On October 4th, 2001, Siberia Airlines Tupolev Tu-154M has crashed into the Black Sea's eastern part, not far away from the Russian city of Sochi, north of the Caucasus.

The airplane was flying from Tel Aviv to Novosibirsk when (as later became known) it was mistakenly shot down by a Ukrainian S-200 anti aircraft missile. The Ukrainian army was holding an exercise on he Crimean Peninsula and fired a missile towards the southern part of the Black Sea, at the same time when the Siberian Airlines Tupolev was flying by. All 78 people on board were killed.

The old soviet-type S-200 missiles have a long range of about 400 km and were used by many former communist countries.

the Ukrainian government has agreed to pay compensations to the families of the victims.

Mid-air explosion of Siberia Airlines Flight 1047 due to terrorist attack

A Tupolev Tu-154B2 of Siberian Airlines/S7 flying from Moscow to Sochi has exploded in the air near Rostov-na-Donu/Rostov-on-Don. It was a tragic terrorist attack that killed all 46 people on board.

Crash at Irkutsk International Airport

An Airbus A310 of S7 Airlines Flight 778 failed to decelerate on landing and overran the runway at Irkutsk International Airport in Siberia. As a result, the plane was engulfed by flames, killing 124 out of 193 on board.

Partnerships & alliances

Plans to join a major airline alliance

The company expressed its with to become a part of the Star Alliance, but it has already showed interest in teaming up with the SkyTeam Alliance members. It's still unsure what will come out in the end.

Allegedly, due to technical and security issues, the Star Alliance has expressed negative thoughts about how things are going with S7. The Russian airline is currently working on improvements in order to minimize the possibility of potential future tragedies.

Partnership with Armenian carrier Armavia    

S7 has a partnership with Armenia's leading airline on flights between Yerevan, Moscow and Novosibirsk.

Current activity and perspectives for the future

Possible further acquisitions of smaller carriers  

In order to further penetrate the Russian market, S7 will need to team up or buy some of its competitors.

Vnukovo Airlines and Chelyabinsk Airlines have been swallowed by S7, which contributed to a comfortable expansion: the clients were already there, as well as the infrastructure, the experienced staff, the all came with the acquired companies.

Therefore, in the future further similar purchases are expected, probably S7 will want to overtake established regional carriers.

Fleet modernization

S7 has placed orders of Tu-204SM and Boeing 787 airplanes, which will improve its fleet. This will mean better in-flight services (such as entertainment, low cabin noise in the 787s), implicating a higher number of clients, potentially.

In order to further expand, the company has to obtain further aircraft. Financially, S7 seems to thrive, more acquisitions of aircraft are predicted within the coming 5-10 years. Medium and long range aircraft are needed by the company to connect distant cities.

 Last modified/updated: June 14, 2007