Juicy: Russia To Welcome Citrus, A New Low-Cost Carrier

Like any other business, an airline is usually set up because of a clear problem that it is trying to solve. Typically this means markets that are unserved, underserved, or in other ways inadequately served. This is no different for Russia’s startup low-cost carrier (LCC) from S7 Airlines, first mentioned two months ago and set to take off in July next year. Now called Citrus, we check it out.

The first flight of Citrus is planned for July 2022. Photo: Getty Images.

What’s happening?

S7 Airlines, the second-largest largest domestic airline in Russia, has confirmed that its new low-cost subsidiary will be called Citrus. The name conjures memories of AirTran (its call sign was Citrus), images of easyJet and Skybus’ liveries, and thoughts of Key Lime Air.

The parent said the name Citrus was selected to reflect a “vibrant and positive travel experience” and, more confusingly, reflecting its goal of connecting less served cities in the country.

With its first revenue-generating flight is expected in July, the LCC will initially use four A320neos with one million passengers targeted in its first year. Four to six aircraft will be added yearly, with up to seven million passengers carried in 2024.

S7 Airlines
Citrus, from the S7 Group, will initially use four A320neos. Photo: Getty Images.

Routes expected to avoid Moscow

It would be obvious if Citrus flew from Moscow – with 20 million-plus people in its metro area – or St Petersburg, the country’s second-largest city. Indeed, that is the focus of Pobeda, the country’s main LCC, while Smartavia, which is transforming into an LCC, plans a base and plenty of flights from Moscow Sheremetyevo. However, S7 says the startup will instead focus on the wider Central Russia.

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While airlines often say one thing publicly and do something else – there is no point given competition advanced warning – the attraction of Central Russia is clear. Corresponding to European Russia, it is an area with around 113 million people and 78% of the country’s population.

How has Russia's domestic market changed
Russia’s domestic market has more than doubled in size in a decade and in 2021, it is up by 14% over 2019. Non-Moscow and St Petersburg have grown quicker since 2019 than the two largest cities. Source: OAG.

The population appeals to Citrus

The large population appeals to S7, which has said Citrus will be a better platform to actively target the “great potential in the cross-regional transportation segment” than S7 itself. And Central Russia wasn’t lost on Avianova, a highly ambitious LCC that ceased in 2011.

While Avianova had expected to remain predominately focused on Moscow and St Petersburg, it also expressed its intention of opening bases across Central Russia, including Samara, Sochi, Rostov-on-Don, and Kaliningrad.

Russia’s former LCC, Avianova, had big plans for Central Russia. Photo: Artem Katranzhi via Flickr.

Crucially, it’s not just the population

Beyond Moscow and St Petersburg, Central Russia has very low LCC penetration, multiple good-sized cities, typically slow overland transport, and a geographic area that could still enable decently high daily aircraft productivity.

It is an underdeveloped area aviation-wise, and a ‘true’ LCC with low seat-mile costs and a small number of weekly flights per route could strongly stimulate demand. As Tatyana Fileva, the chair of the S7 board, said:

“In the Russian market, low-cost air transportation is available mainly in Moscow and St. Petersburg. The Ministry of Transport of the Russian Federation also highlighted the necessity to create another low-cost airline in central Russia in order to improve the accessibility of the regions.”

What do you think about the name Citrus? Let us know in the comments.