Aeroflot mulls restructure under new CEO

Riga
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New Aeroflot general director Vitaly Savelyev is planning to revamp the Russian carrier's structure under a modernisation which could ultimately include the sell-off of some key divisions.

Savelyev, who has been appointed for a five-year term, succeeded long-term Aeroflot chief Valery Okulov in April.

An organisational restructure is among the new Aeroflot chief's top priorities and an international consultancy firm will soon be selected as an advisor, explained Aeroflot deputy director general for public affairs Lev Koshliakov at the recent "Going to the North Hub Riga" event in Latvia.

"[Savelyev] knows how to do this kind of restructuring. His combination of experience is very-well suited to an airline during this crisis," notes Koshliakov. Savelyevhas a background in banking and finance, and previously led the telecoms division of Russian consumerfirm Sistema.

Koshliakov adds: "He will make the company less heavy and introduce full-scale modern management, in terms of corporate structure, personnel development, and training."

Another priority will be evaluating whether functions such as ground handling, IT, maintenance and training should remain in-house. "We don't do much outsourcing. This has been forced by the under-development of the market," says Koshliakov.

"Two or three years ago this would not have been economically viable. Now the market has changed greatly and maybe we can take the time now, with the restructuring and cost-cutting programme, to look at this again. There are more providers of these services in the market now, so it will be easier to make a sale."

The strategic evaluation and new tactical plan should be complete by the end of 2009, saysKoshliakov. He notes Savelyev is also focused on the Russian market and how best to develop Sheremetyevo's transfer potential.

"Savelyev knows how to do this kind of restructuring. His experience is very well-suited"