Oleg Daukshes, Omsk Tsentralny Airport - Аэропорт "Омск Центральный"
Release Date: 2008-11-26
One of the recurrent themes during the last Airport Association conference in Moscow in November 2008 was that regional Russian airports lack assets and investments. Omsk Airport is one of the 30 largest Russian airports. How did you attain and are managing to maintain your position in such a competitive context?Let’s begin with history. During the privatization period in the early 90s, many airports took the most profitable assets out of the general asset structure, such as on-board meals and lubricants (the latter went to fueling facilities). Thanks to these assets, Omsk Airport has managed to make profit and investments and, if needed, sustain itself. Many services - such as aviation safety service - do not bring direct profit so the growth of costs is compensated with the strongest assets which keep us afloat.
Omsk Airport was organized in 1929. During all these years our policy was to maintain continuity of personnel - workers, engineers, managers and, currently, the amount of staff rotation is adequate. All the new employees are qualified in their fields. Although the activity of the airport increased 20-22%, the staff remained at the same level because we increased productivity at the expense of work efficiency. Every year, we allocate millions of rubles for staff training and, thus, better qualification has allowed us to introduce new technologies, increase efficiency and also the operational life of the equipment.
One of the most pressing issues with airports - particularly, this problem was mentioned in connection with Pulkovo - is serious growth of operation costs due to outdated equipment. What has been Omsk Airport’s investment policy and strategy in the recent years?
It is no use comparing Omsk with the Pulkovo airport as their volume of activity is different. However, equipment was worn out everywhere. In our case, light alarm equipment was completely worn out and we replaced it completely at our own expense about 6 years ago, although now such works are state-invested. This increased the airport’s capacity for receiving aircraft even in the worst weather conditions. In 2001, we repaired the runway which was in critical condition. The state had no means to subsidize it so we were forced to borrow money. It was a necessary step in the interests of the state and the company.
Seven airports in Russia were chosen as strategic hubs but the Omsk airport is not among them. Does this mean that its strategic position is under threat or that the role of the city and its airport is different?
Most of these airports were the basic management airports during Soviet times, with all the infrastructure and flights concentrated there: this new structure resembles Soviet-type hubs. Omsk Airport is a special case: it is 700 km away from Tyumen and 700 km away from Novosibirsk. 20 years ago there was a huge volume of transit traffic through our airport (up to 100 daily flights) but then (in the 90s) the civil aviation collapsed and the main task was to survive.
Currently, the airport is working to increase its activity: terminals are reconstructed, taxiways are repaired and we are going to attract new partner airlines. There are 2 major cities beyond the Ural Mountains - Novosibirsk, the key Siberian business centre, and Omsk, so we have to be ready for an increase of business activity. All the actions for airport renovation are done with a 20-30% capacity reserve. Crisis periods come and go; I am sure that Russia will develop, so our main strategy is not only to keep the current level but also to be ready for the next step.
Our priority now is to increase production efficiency, bring the volume of activity back to pre-crisis level (the civil aviation crisis) and continue improving our technology. We also plan to develop the international sector because international transport volumes will increase. Reconstruction of the international sector of the airport will begin after reconstruction of the domestic terminal.
One of the factors that have influenced a fall in our activity was the collapse of AirUnion: its share in our airport was 26%. Their debt amounts to 70 million rubles. A large amount of turnover capital makes it difficult to plan the next year.
Are there any growth reserves in the airport, like cargo transportation?
It is difficult due to several reasons. Firstly, the amount of cargo is growing very slowly because the best option for small cargo is transportations by motor and railways that go through Omsk. Secondly, air transport from China has been redirected to Kazakhstan.
Why did Chinese airlines redirect their flights to Kazakhstan and is there any hope they will come back?
It happened about 5 years ago during the outburst of SARS in China. All cargo connections with China were suspended. When their flow was revived, Kazakhstan came up with better conditions for airlines, such as a lower fuel price. I have recently been to Pavlodar (Kazakhstan) where the planes are refueled and made sure that fuel is really cheaper there. Growth of fuel price in Russia increased 2.2 times in 5 months; the increase in Europe was 10-15%.
For this reason we do continuous market supervision and keep track of all market tendencies. We are in a monopoly situation in Omsk but it is a local monopoly: we compete with Novosibirsk, Barnaul and Tyumen and compare pricing policies. One of the parameters that we track is the market price of kerosene and services. For example, it is normal in a competitive environment to reduce prices 5-10% to attract the airlines.
The world airport business has changed so much in the last 20 years - new sources of profit, concessions and new types of partnerships such as state-private partnerships. Airports are active in inviting new partnerships and investors, but, as it was mentioned at the airport conference, there have been some disagreements concerning property and management issues. What is Omsk Airport’s situation and what are the opportunities for partnerships or concessions?
The matter is that the structure of our authorized capital does not always allow this: an 85% share belongs to the state. Recently, regional management suggested transferring a share to regional property. Part of the share is ready for it; however, a decision of the government and of the state property authority is necessary to promote this process. Omsk regional government has announced its readiness to invest but, with the current crisis, our region remains subsidized.
Prospectively, all types of ownership should be defined and structured. Until the state arranges property management issues, the investment situation is not likely to improve. In particular, we are asked to specify which part of our large property is federal and which is private.
Another issue is legislation. What we expect from the new head of Rosaviation (Federal Air Transport Agency) is to introduce rules to regulate the state-airports relations and airports-airlines relations in order to prevent payment in arrears and other emergencies. The legal situation is so foggy that in the last 15 years we have had to rely on our intuition. If the new law “About airports” enters into force in the near future, it would be a great relief for us: laws define rules of the game that we can rely on.
| Company: | Omsk Tsentralny Airport - Аэропорт "Омск Центральный" |
| Position: | First Deputy General Director for Production |
| Country: | @ Global |