Published: 8/21/1998

Transaero Airline's shareholders have decided not to reveal the financial results for the past year to the public, said Aleksandr Pleshakov, chairman of the company's council of directors at the press-briefing on 21 June. Instead, Pleshakov gave comments on the first half of this year. Initially, the airline experienced a 2-4% growth in traffic, which ended in March, largely as a consequence of the new political and financial crisis in Russia. "We felt it immediately - on some routes, for instance, Moscow-Yuzhno-Sakhalinsk and Moscow-Petropavlovsk, the traffic dropped by 15-25%, reflecting the worsening of the economic situation in the country", Pleshakov said. In the summer the traffic stabilised and gradually normal business was restored, partly as a result of clever steps by the new Government and partly due to the introduction of lower tariffs on domestic routes. For instance, the fares for Moscow-Ekaterinburg have dropped by 25%, Moscow-Omsk by 20% and Moscow-Vladivostok by 10%. In the first half of 1998, the airline made 6,743 flights, including 174 charters. The share of scheduled flightsincreased by 8% over the same period of the previous year. In all, 669,314 passengers were carried, some 10% more than the same period for 1997. The seat-load factor increased from 62% to 65%, and the punctuality of flights from 78% to 81%. A significant rise was registered in cargo traffic: it rose by 122%, to 3,988,000 tonnes. Transaero experienced a rapid growth in 1992-1996, where the volumes of traffic and the fleet doubled in one year. "In 1997, the growth was much smaller. We have had a 'plateau', which gave us an opportunity to catch our breath, to restructure the company in order to decrease the cost of flight operations. It was very important because the fleet and its maintenance together accounts for 40% of our overall expenses", Pleshakov commented. To reduce the cost of flight operations, Transaero acquired new aircraft from Boeing. In May, the airline took delivery of its first 737-700 and 767-300ER. Two more 737-700s will follow in September. The 767 is now flying on inner Russian routes, from Moscow to Vladivostok and Yuzhno-Sakhalinsk, to the great delight of passengers. In June, the 767 flew 450 hours and the 737-700 400 hours. Pleshakov said that the DC-10-30 will finally leave the company's inventory in October. Last year three DC-10s brought operational losses of $20m, so "Transaero is happy to get rid of them". This would allow an increase in the average seat-load factor from 65% up to 70%, the chairman claimed. Also, a leasing agreement on two 757s expires this year, and Transaero is considering replacing them with Sirocco Tu-204s. The three new Boeings are on the US register. Transaero crews have obtained permission from the FAA to operate them, including the right for its own personnel to maintain the 737-700. By the end of the year Transaero technical staff should be qualified to maintain the 757 and 767. "This does not mean we would stop mutually-beneficial co-operation with foreign service-providers. On the contrary, we are signing an agreement with Lufthansa Tekhnic shortly", Pleshakov said. This year Transaero opened one new route, Moscow-Samara, and has plans to open routes to Tyumen, Surgut, Khabarovsk, Rostov and Volgograd. After two years of discussions, the UK aviation authorities have agreed to allow Transaero to fly Moscow-London route non-stop, with an initial frequency of four flights a week, starting in November. Transaero has dropped plans to lease Yak-40s for serving domestic routes due to the firm commitment to highly-profitable new-generation aircraft with a high level of passenger comfort. In the meantime, the company's studies revealed that the Il-114's Klimov TV7-117 engines need a better TBO for it to be a commercially viable product. (AL898.2) (VK)

Article ID: 250