Aeroflot and Transaero try to boost passenger numbers

Published: 9/13/1999

Facing mounting losses and low passenger volumes, two of Russia's leading airlines are trying to lure back customers with frequent flyer programmes.Aeroflot, Russia's largest airline, introduced its programme in April 1999. According to Nadezhda Golubeva, an aviation analyst with the Aton brokerage in Moscow, Aeroflot's planes are currently flying at only 50% capacity, while rising oil prices have cut into earnings, pushing the airline into the red. Meanwhile, Transaero has tweaked its existing programme, which was introduced in 1995, to make it more attractive to air travellers. Between October 1st and December 15th 1999, all frequent flyers will be awarded double points, as a measure to attract business during the traditionally slow winter season. Transaero recently reversed its policy of demanding that frequent flyer members purchase tickets at full fare in order to receive points. Galina Ponomaryova, a Transaero spokeswoman, acknowledged that this was in response to a continuing downturn in the Russian airline passenger market. However, Transaero has maintained its membership rules for its programme - called Transaero Privilege - which are more restrictive than those of Aeroflot and most foreign airlines. "A passenger that flies two or three times a year does not count as a frequent flyer as far as we're concerned," said Olga Chaekovskaya, who heads Transaero's programme. Alexander Filipov, Director of the Aeroflot Bonus programme, denied that market conditions influenced his airline's decision to introduce a frequent-flyer programme, contending that it was part of Aeroflot's ongoing efforts to improve customer service. "We have done a lot to make passengers' experiences with Aeroflot more pleasant, such as switching to Boeings for international routes," he said. "This is just one more step." Filipov would not divulge the number of free tickets that have so far been given away by Aeroflot, but commented that: "We're not talking about one or two people - it's more than that". Transaero also refused to release information about free ticket awards. So far, the success of Aeroflot's programme has been modest - with only 10,000 members to date, according to the company. Aeroflot carried roughly 4.5m passengers last year. Transaero has more members even though it carries far fewer passengers - around 1.3m in 1998. However, its programme has been around for much longer than Aeroflot's. Both the Aeroflot and the Transaero programmes are tiny when compared to those of foreign airlines. Finnair, which has passenger volumes comparable with Aeroflot's, has roughly 450,000 members in its Finnair Plus programme, and gave away 41,000 tickets last year, according to the company's Moscow sales office. Travel agents and analysts familiar with the programme claim that Aeroflot has not marketed its programme as hard as either Transaero or its foreign competitors. Kim Iskyan, an analyst with Renaissance Capital in Moscow, said Aeroflot's corporate culture is working against it as it tries to promote the frequent-flyer programme. "Transparency isn't one of Aeroflot's strengths, and a marketing campaign that tells people what you are going to do and how you are going to do it implies a certain amount of transparency," he said. In spite of the lack of a highly visible marketing campaign, some travel agencies reported significant interest in the Aeroflot Bonus programme. "You can't compare a programme that has been in existence for several months with one that has existed for several years," said Galina Redkina, of the Central Travel Agency, a private firm. "Within the bounds of the Russian market, Aeroflot's programme will develop very quickly."

Article ID: 856