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Fast-growing East Line considers airline's future

MURDO MORRISON / MOSCOW

East Line Group, operator of Moscow's fast-expanding second airport, Domodedovo, is considering the future of its airline, East Line Airlines, as it focuses on ambitious plans for its airport services business.

The largely cargo carrier operates 18 Ilyushin Il-76s and 17 other CIS-built aircraft on Russian and CIS routes and is "profitable". However, it represents only about 15% of the group's $1 billion turnover and is "not core", says East Line Group chairman Dmitry Kamenschik.

East Line Group began as a cargo forwarder in the early 1990s, but since taking over the operating lease of state-owned Domodedovo in 1995 it has been branching out into airport services, including maintenance, in-flight catering, refuelling, cargo handling and opening a 300-room airport hotel.

"The airline has always been profitable," says Kamenschik. "But the board will be deciding on the fate of the airline from a strategic point of view in August. It was very useful at the beginning, but now it is not core." He will not say what the options are.

The group is spinning off its cargo-handling operation from the airline into a separate business, East Line Logistics, to reflect the fact that most of the consignments it deals with are transported on other carriers, many of which compete with East Line Airlines.

East Line Group expects Domodedovo - shortlisted in the infrastructure and environment category in Flight International's recent Aerospace Industry Awards - to overtake Aeroflot hub Sheremetyevo as Moscow's number one airport next year, with more than 10 million passengers. This follows a $600 million refurbishment over five years. British Airways and Emirates are the latest airlines to fly there, with BA switching its twice-daily service from Sheremetyevo last week.

East Line Technik, the group's maintenance operation, has won approval from Boeing and expects to receive European JAR 145 certification at the end of the month to carry out B- and C-level checks on Western aircraft.

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