Ukrainian carrier looks for substantial growth in its business under Transaero veteran

Published: 11/15/1999

According to Grigory Gurtovoi, General Director of AeroSvit (often known as Aerosweet in English, but the company prefer this spelling of Air World according to the GD), one of the three largest Ukrainian carriers, the airline will increase its flights to Russia by 60% during winter 1999/2000. From the beginning of November, a Boeing 737 will fly 10 flights per week between Kiev and Moscow: three more than in the summer. Airlines have to compete with trains on the Moscow-Kiev route. A one-way ticket costs Rb 650 ($25) compared to a minimum of $80 for an economy flight. However, Gurtovoi is confident that business passengers will opt to fly in order to save time, and the flight timetable has been structured to reflect business needs, allowing passengers to complete a round trip within a day. Gurtovoi claims that, during the first nine months of 1999, passenger volume increased by 7.5%, to 122,000, compared to the corresponding period in 1998. Russian passengers account for around 50% of the total. AeroSvit's revenues grew by 11% over the period, to $21.6m, compared to 1998. Its ticket sales in Moscow have rocketed, with the network of ticket offices growing from five to 340. AeroSvit was established in 1994 is 30% state-owned, with a substantial Israeli shareholder Caspi Aviation and employs some 400 people. It plans shortly to replace its fleet, currently made up of three Boeing 737s and one An-24, with Boeing-737-300s. At present, the airline operates air routes to 23 cities in 11 countries. It recently opened a new route to Budapest and intends to start flying to Sofia. It is the only Ukrainian company that flies to Israel and Cyprus. While, by Russian standards, it is a relatively small airline, in the context of Russian-Ukrainian air connections, it is second only to Aeroflot. Gurtovoi, who joined the airline a year ago from Transaero, where he was one of the founders, is confident that there is significant potential in the development of air traffic between Russia and the Ukraine, given a combined population of 200m. According to the airline, in order to avoid a tariff war, AeroSvit has agreements in place with Aeroflot, Transaero, Krasair, Vladivostok Avia and Urals Airlines for the joint servicing of a number of routes, this has substantially improved the airlines marketing reach with commensurate increases in AeroSvit's Russian sales. Despite its agreement with Transaero and other carriers, AeroSvit claims that its tickets are cheaper than those of Transaero, offering what it describes as the cheapest tickets to Western Europe and North America using connections to western counterparts. The airline is however, not without its problems, as shown by the decision to withdraw the airline's licence to fly to Greece earlier this year by the Greek Ministry of Transport, due to a dispute over compensation to be paid to the relatives of the victims of an AeroSvit Yak-42 crash in Greece in 1997.The flights to Greece at last report were being provided by Air Ukraine.

Article ID: 1078