Aeroflot moves to split with Berezovsky controlled Aeroflot Tour Group (ATG)

Published: 12/6/1999

Aeroflot has taken its former partner, the Aeroflot Tour Group (ATG), to the arbitration court, contending that it can no longer use the Aeroflot name. Founded by Leonid Itskov, former Deputy Commercial Director of Aeroflot, ATG acted as the intermediary between the airline and a large number of travel agency networks that sell Aeroflot tickets, such as Akademservice, Lanta-Tour and Begemot. According to Julia Kovalenko, Assistant to the General Director of ATG, the company bought tickets from the airline at a 30% discount off base fares. This resulted in ATG eliminating its competitors, which had previously sold some 40% of Aeroflot"s tickets. In April 1999, Aeroflot requested that ATG stop using the Aeroflot name. Kovalenko attributes this to management changes at the airline, specifically the sacking of Krasnenker and Itzkov. Aeroflot then set up Aeroflot Travel and, according to Boris Eliseev, Head of the Legal Department at Aeroflot, intends to work directly with former clients of ATG. ATG"s fall from grace seems directly linked to Valery Okulov, General Director of Aeroflot"s desire to rid the group of all Boris Berezovsky-related companies. It has already severed connections with Objedienny Bank and the Swiss company, Andava, which handled Aeroflot"s overseas payments. ATG is unlikely to defend its right to use the Aeroflot name, as there is no written agreement in place. Its affiliation with Aeroflot is still in force, but it is actively seeking new partners. According to Kovalenko, de-registration procedures are near-completion and are likely to be finalised by the end of the year.

Article ID: 1173