Paul Duffy/MOSCOW
Aeroflot Russian International Airlines' new deputy chief executive, Alexander Zurabov, has outlined a revised strategy which will see a reduced international route network twinned with a new domestic feeder system.
Meanwhile, Aeroflot's biggest rival in overseas operations from Moscow, Transaero, has reported a profit after its own reorganisation.
Zurabov says this month Aeroflot will launch an internal restructure, closing some departments , merging others and forming new units. The move follows a review by consultants McKinseys, aimed at establishing a three-to-five-year strategy.
Aeroflot has subsequently attacked its cost base by negotiating keener prices with suppliers, revamped sales structures, and has revised its cash management system, introducing a mechanism for centralised control of overseas cash.
The carrier has unveiled a timetable featuring fewer flights and focusing on higher yield routes (Flight International, 4-10 April), and Zurabov - charged with implementing the strategy by Aeroflot general director Valeri Okulov - reveals that the carrier will build domestic routes to feed core international services at key hubs.
He confirms that Aeroflot is planning to renew its regional fleet, and is negotiating with Antonov and airframer Aviakor for up to 50 new An-140 aircraft, powered by Pratt & Whitney Canada PW127s. The An-140 move is despite the airline's preferences for Western types, with financing terms for local orders meaning "monthly repayments are at least equal to those of Western aircraft".
Zurabov adds that Aeroflot may form more regional subsidiaries. Although deals with existing carriers are possible (Aeroflot has 22 in Russia and elsewhere in the CIS), he claims that retaining loss-making airlines could stymie feeder development.
Although it was profitable overall last year, Aeroflot failed to make an operating profit. Rouble revenues grew, but dollar equivalents fell from 1998's $1.4 billion to $1.19 billion. The airline carried 4.6 million passengers or 21.5% of Russia's traffic.
Meanwhile, Transaero reported positive results from downsizing its fleet and staff and reorganising routes. Russia's largest non-state owned carrier saw passenger numbers halve last year, but reduced operating costs of 1.5 billion roubles ($54 million at year-end rates) yielded its first-ever profit of 126 million roubles before tax.
Source: Flight International
