Markus Klaushofer, Sheremetyevo International Airport - Международный аэропорт Шереметьево
Release Date: 2010-06-22
JSC Sheremetyevo International Airport is one of the biggest Russian airports in terms of regular international traffic. In 2009, the airport has serviced 14,764,000 passengers and operated 159,896 takeoffs and landings. Sheremetyevo is the air-hub of Aeroflot, the Russian flagship carrier, and a hub of the three global air alliances: Sky Team, Star Alliance and Oneworld.Markus Klaushofer, former Marketing and Business Development Director of Vienna Airport, was invited to head the aviation marketing and business development of Sheremetyevo in October 2008 and has successfully launched an ambitious campaign of upgrading the Sheremetyevo’s marketing and communications strategies to international standards to create extremely appealing conditions for the airlines. By 2015, Sheremetyevo expects to increase its passenger traffic to 35 mln people and become the best airport in Europe in terms of customer service.
Markus, you were invited to work as CCO of Sheremetyevo airport back in 2008, right in the outbreak of the financial crises. What was your priority when you came here?
Our major goal was to establish clear and good relationship with the airlines. The second priority was to get new airlines. For instance, last year Malev (Hungary) switched over to Sheremetyevo. We have also managed to establish very good relations with Avianova, the new Russian low-cost carrier, who was finally convinced to move from Vnukovo to Sheremetyevo.
Priority number three was to establish a strategy for marketing, business development and communication with airlines. We had to gradually build everything from scratch, since this was a new brand position that was offered to me that did not exist before in Sheremetyevo. This is a very big challenge, and, moreover, it’s a special experience for me as an Austrian because working in Moscow is not the same as working in Paris, London or Vienna.
There is a discrepancy between the jobs offered to expats in Russia and the available resources within the companies. How did the offer match the reality?
Yes, it’s really challenging. I have to say that the Austrians and Russians share a similar mentality which helps them to understand each other quite well. Besides, a lot of Russians live and work in Austria. Like Germans, Austrians are quite well-organized and resourceful. This is why there are so many Austrian companies on the Russian market: Strabag, Bank of Austria, Raiffeisen Bank, Red Bull… As you can assess, it could look very unusual for a relatively small country like Austria to have such a large scope of successful brands in such a large and diverse country like Russia.
You have been working in Vienna airport for ten years. How is your experience applicable to Sheremetyevo?
In both cases, the priority was to develop the infrastructure. As in Vienna airport, the main focus was on creating better relations with airlines, with the aviation industry and with the cargo industry. Besides, the good thing about Vienna is that it’s the headquarters of the major handling and cargo companies for Eastern Europe and Russia, which is very useful.
Sheremetyevo has been transformed in a better airport over the last couple of years in terms of new infrastructure and new terminals. The original terminal was built for the 1980 Olympics, so it explains why the infrastructure was not that appealing before. This is why we have launched three new terminals (C, D and E) conveniently linked with central Moscow via Aeroexpress, the new express train. Now the flights are split among the terminals which is a very clever move: there are 77 charters during the seasonal peaks, and I would rather have charters and business flights in different terminals in order to not frustrate the business passengers and passengers of regular flights. A lot was also done to ensure quicker passport and security control for the passengers.
In the Soviet times Sheremetyevo was the main hub to go to Asia…
Yes, and our efforts are focused on making it regain its hub position. The current objective is to develop the hub to get more passengers together with Aeroflot. It implies a lot of PR and sales to attract new airlines. If you compare the annual passenger flow in Sheremetyevo, which is 15 mln people, with the size of Moscow, the biggest city in Europe, you’ll see the tremendous potential of the airport.
In any case, notwithstanding the importance of PR and marketing, other airports are doing a good job, and this is probably the reason for Domodedovo’s success. What are the priorities to combine the commercial aggressiveness with the reality?
Sheremetyevo has a corporate university where we explain why little things make a big difference. This is actually a very clever idea because if you demand something, you should explain how to do it because Russia is not a tourist country like Austria where the business is based on a ‘service culture’. Of course, it will not work if the infrastructure is not proper. So, the key elements are the infrastructure and the attitude of the people whom we have to give the skills to handle the passengers in a nice way.
In this regard, one of the first successful steps was to address the issue of communication problems. I had to spend a lot of time just to learn to understand the local people. Back when I accepted this job offer, my Russian friends explained what was in store for me in my future work in Russia. Things can really be quite frustrating at times but it’s not a big problem if you stay very focused and very close to every process.
One of our activities was a trip that we arranged for the travel agents and tour operators of Air France to Sheremetyevo with the Aeroexpress that commutes between the airport and the city center. We took them specifically to show them the new infrastructure and make them see what they sell. Now they know what they’re talking about when they talk about Sheremetyevo and its facilities. It has proven once again that word of mouth does the best marketing, as well as social events like celebrating the new route to Torino that we have launched with Alitalia.
The best resource for successful communication with the airlines is personal contact. E-mails and calls can do a lot but you’ll lose your customers unless you make personal visits. Moreover, opening rep offices in every country costs a lot of money, this is why is important to maximize our resources and contacts.
You have mentioned some cases with European airlines. When it comes to a ‘transit hub’, it is quite typical to see a lot of passengers transiting in Sheremetyevo from Japan, India, China and other Asian countries, and who are often stuck in airports for hours waiting for the next flight. What importance are you bringing into this segment?
Traffic coming from Asia represents a huge potential for development. What’s important for us is that almost all the Asian carriers fly with Aeroflot, Sheremetyevo’s hub carrier because it is crucial to form the hub traffic together with the hub carrier who sells the tickets and generates the passenger flow. Traditionally, airlines have a love-and-hate relationship with airports. In the end of the day, it is also about how the schedule operates, and not only about the infrastructure. Both have to work together.
The major problem with hubs is that they’re not efficient, due to delays and extra expenses required for the technology and manpower to make it work. It has been proven that smaller airports handle transit passengers in a much efficient way, with less waiting periods.
Sheremetyevo is the second largest airport however traditionally it was the first. How large is the gap with Domodedovo (DME) and what is the strategy to catch up?
In the late 80th passenger traffic in Domodedovo was higher than in Sheremetyevo. However, Sheremetyevo was the first airport in Moscow to reach and surpass peak passenger traffic numbers of the Soviet period.
We’re gradually increasing our market share on the Moscow market. In terms of the number of airlines, DME is clearly ahead of us. In terms of passenger flow, the gap is less than 2 mln passengers. The matter is that DME offered very good customer relations to the airlines who confessed that they were attracted by the fact that DME was taking care of the new customers and offered a better infrastructure. As a result, Sheremetyevo lost a lot of foreign airlines. But even in those conditions we kept increasing the passenger flow. It’s absolutely clear and logical that Sheremetyevo is the hub of the home carrier and if you work, you’ll make the best airport. We are working on winning the market share back. Of course this is one of the reasons, as I mentioned, for the creation of the position that I am heading now.
Moscow, even though it’s not yet a top tourist destination, is very well-positioned in terms of geography as the crossroads of Europe and Asia. It’s one of the essential factors to help Sheremetyevo gain a very competitive position.
Are there any chances to pull back the airlines that had left Sheremetyevo?
It takes a lot of time and efforts. DME spent years to get British Airlines or Lufthansa on board. On average, it takes three to five years before a major carrier moves in. But if you have them, you have them all.
Do you think there are still opportunities to attract new airlines to Russia or everything is settled?
The funny thing is that many airlines complain that Russia is a very complicated market. But if we look at the competition, Russia is a unique city with three airport providers. It’s an extremely competitive market. Moreover, the prices for airport services are very cheap as compared to other countries because of the competition, although Moscow is by no means a cheap city.
Which new airlines are you considering?
The Chinese airlines have the biggest potential. The current airlines that fly to Sheremetyevo from China are Air China, Hainan, China Eastern; we’re considering adding Hong Kong Express, China Southern.
Russia and China have a very high passenger exchange. It’s a booming market. I don’t think that Europe can show such strong growth. If we establish ourselves as a good brand for the Asian market, it will work because Moscow is very well-placed geographically which allows saving time for flights from Europe to the East.
Within a five years’ time, what novelties do you expect the customers to find?
The first thing you’ll see is a smooth flow of operations, very few delays, fast security and immigration control. We have invested a lot of money in that. You’ll see that the airlines are also quite happy. In five years Sheremetyevo will be the number one airport in Russia.
If you have to pick an example of best practice that you could work on, what comes to your mind?
Vienna airport has reduced the flight connection time to 25 minutes making it the fastest flight transfer in the world. So, transferring fast and easy is our goal. Actually, Vienna airport is even larger in terms of passenger flow: 18 mln passengers as compared to 15 mln passengers in Sheremetyevo. It proves that this is a feasible goal.
Our second priority is to increase non-aviation revenues, primarily Duty Free shopping. The shops should always be close enough to the gates and must not reduce the visibility of the gate signs. What I would most of all like to have in Sheremetyevo is Duty Free on arrival. Russians spend an incredible amount of money abroad. If we sell what they normally carry on arrival, it would be perfect! The only issue is the official permission that we’re waiting for.
In a more personal level, what is your impression of working in Russia?
It’s amazing how interesting Russia is as a country. Moscow is very different from New York which represents a very open society where 80% of people are non-American. If you get used to Russia, you’ll see that it’s a great place to live.
I have always thought that the Russians were very cold people but they get very emotional easily and like to provoke discussions. However, if you manage to convince them, it works. It takes a lot of energy to get them on the board and you have to keep very close control of everything, but, on the other side, you can invent something using your new ideas. It’s a lifetime experience.
What would be your greatest advice to a foreigner that has to come to work in Russia?
You have to understand why Russians do things this way and not the other way and make sure that your partner is never too far from you. You really have to get involved, make strategic decisions and know what is happening. Do not think you will come here to design some sort of ‘strategy’ and wait for your team to apply to it! You should accompany your team in the process. You never know if things will take six months or half a day. As I have mentioned earlier, a lot depends on good personal relations.
Markus, thanks for your interview for RussianAvia.net !
| Company: | Sheremetyevo International Airport - Международный аэропорт Шереметьево |
| Position: | CCO |
| Country: | Russian Federation |