Trade unions have a go at Aeroflot, but it is the same old song

Published: 1/27/2000

Shermetyevo"s trade union, never the greatest supporters of Russian flag carrier, Aeroflot, has complained to the media about the airline"s failure to consult the unions over the management of the carrier and its use of non-Russian aircraft. The pilots" union claims that the airline owes over $100m in unpaid leases on foreign aircraft and believes that the concessions on import duties granted to the airline for the import of aircraft are illegal under Russian law. It also believes that the fall in passenger volumes has rendered the foreign aircraft unnecessary, a recurring theme from the Aeroflot old guard, recently given some weight by the admission of Valery Oklov, Aeroflot"s General Director, that flights to the US using foreign aircraft were operating unprofitably. Whether the unions favoured aircraft, the Il-96-300 would be significantly more profitable, given its higher fuel consumption, is another matter, but Ilyushin claims that the cost of operating 2 Il-96-300 is $29.1m less than the equivalent Boeing –767s.How this comparison is calculated remains unexplained and does not cover the issue of residual values. The old accusation of the leasing being a means of illegally exporting capital has also been given an airing, but for whose benefit is less clear, as the leasing contracts that have been revealed appear to be in line with market rates and, in the case of the Boeing 777s, at extremely favourable ones.

Article ID: 1358