Evgeny Bachurin, Moscow Airlines - «Авиакомпания Москва»
Release Date: 2010-08-04
Evgeny Bachurin, CEO of Atlant-Soyuz, was interviewed by Russianavia.net to discuss the position of Atlant-Soyuz on the Russian market, its plans for operation development and its strategic outlooks in the view of the current rebranding.Mr. Bachurin, could you give us a short overview of the current position of Atlant Soyuz? What is your strategy of developing the airline and the considered investments?
Atlant Soyuz currently sees its main objective in becoming the largest carrier of Vnukovo airport by 2015, with a capacity of transporting 6 - 8 million passengers depending on how quickly the size of the fleet increases. By that time we are planning to have 70 - 90 aircraft in operation, with the current turnover of about 1 billion USD. Recently, Atlant Soyuz has been developing its new strategy and underwent rebranding. The new development program has already been approved by the Moscow Government, our major shareholder. We expect to sign all the necessary documents in June 2010 and begin a gradual change of the corporate identity to Moscow Airlines. Next year, we also expect the delivery of four new Boeing 737-800 NG, with the arrival of two in April-May 2011 and the other two in August–September 2011.
In your view, is this the launch of a new airline or just a re-branding of the existing one?
I would rather say that this is the launch of a new airline. Historically, Atlant Soyuz was created as a cargo airline and then became a charter carrier eventually joining Krasnoyarsk Airlines (Krasair) which went bankrupt at that point. However, Atlant Soyuz also gained a valuable network from Krasair. Although the network is not very broad, it is substantial enough to offer destinations in the Central Asia, with the former Soviet republics - Tajikistan, Uzbekistan, etc. In addition, we’re also planning to extend operations to other CIS countries as soon as we receive the traffic authorization. Atlant Soyuz operates charter flights to Europe and is attempting to establish some regular destinations as well.
For someone relatively unfamiliar with Russia, it may seem a bit strange to open a new airline, be it big or small, in a market where the number of airlines is already large. Furthermore, some niche companies are already firmly established in Russia, such as low-cost airlines. From your experience in the industry, you should have a good view on the entire market. Do you think there is a need for a new airline, and where will it fit in the picture? Lastly, regarding Moscow, why are you developing a third hub in a city that already has two?
Moscow is a very big city, and the figures show that over the past 10 years it has been growing faster than any other city in Russia. Moscow accounts for about 70% of total Russian air traffic, so this provides a sufficient demand for Vnukovo to act as the third hub. The construction of a new terminal by the Moscow government demonstrates this increasing demand. A great advantage of the Vnukovo Airport is its accessibility due to the well-developed transport infrastructure around it. The Moscow government’s heavy investments into the new terminal’s construction and other infrastructural projects exhibits interest in having their own carrier. Atlant Soyuz is referred to as the home carrier of Vnukovo Airport. If an airport doesn’t physically have a home carrier, it’s detrimental to its activities and would hinder the Moscow Government’s investment plans for the new terminal’s construction. Therefore the terminal should be used efficiently, which requires our company to build a proper corresponding network. That’s our goal and how it’s been negotiated with the Moscow government. This industry requires large capital investments. Therefore, we agreed that if the Moscow Government owns Atlant Soyuz, it would have to be designated as the hub carrier.
Looking at the growth of the passenger market in Russia, if Atlant Soyuz is to reach 6-8 million passengers by 2015, it would have to take some market share from its current competitors. Why do you think it’s possible?
Atlant Soyuz’s is currently ranked 15th in the industry however this is not a permanent position. The progress made by other airlines witnesses that the size of the fleet is always the determining factor for the company's market share, therefore we intend to use the investments to expand our fleet. Case in point, when Krasair - an airline which had up to 5 million passengers annually – stepped out of the market, its competitors took over KrasAir’s clients. But I believe there is a piece of cake for everyone.
You have mentioned plans to develop operations of Atlant Soyuz towards both CIS and the EU. What do you think will be the ratio of domestic and international flights?
I would say that domestic flights would account for about 65% - 70%. Ideally, we will try to make it two equal shares but I doubt it is possible because international operations are restricted and, moreover, Aeroflot has a substantial monopoly.
Aeroflot has joined Sky Team. It looks like joining alliances is increasingly more important for the airlines. Is Atlant Soyuz regarding any possible alliances?
We will only regard it after we become one of the top three Russian carriers. We’re also eyeing possible alliances with One World and with Lufthansa; this could be beneficial both for Vnukovo and for us.
On a more personal note, how difficult was it to switch from your work at the Federal Air Transport Agency to a private airline? Both were experiencing extremely challenging situations. The Federal Agency had to face a downturn of Russian aviation, and the private airline was highly indebted.
There’s definitely still a lot of work in store for us. As a matter of fact, when I came to Aeroflot in 1999, it was in an even worse condition than Atlant Soyuz is now. Aeroflot was losing money, its capitalization was negative, but then it became a successful airline which can now compete on the Western markets. Currently, a strong team is working in Atlant Soyuz. Without spending much money, we’ve been able to create a new rebranding strategy which did not require any costs, with very high international quality.
What was the main challenge on the personal level?
As a former Commercial Director in Aeroflot, it was a bigger challenge for me to go to the Federal Agency. Coming back to business was no challenge at all.
Mr. Bachurin, thank you very much for your interview!
| Company: | Moscow Airlines - «Авиакомпания Москва» |
| Position: | CEO |
| Country: | Russian Federation |