Airport operator finds business tough , but profitable, although not from operating an airport

Published: 9/16/1999

In a recent interview with regional newspaper, Severny Krai, Nikolai Kupriyanov, Director General of Yaroslavl airport, Levtsovo, and Yaroslavl Airlines, reflected on the running of an airport and a small airline in contemporary Russia. According to Kupriyanov, competition from the recently opened Tunoshna Airport in Yaroslavl is depriving his company of the opportunity to handle larger aircraft, such as the Tu-154. He added that, in order to compete, completion of 2,200 metre runway was required. The programme requires additional investment of Rb10m, on top of the Rb80m already committed, and the company simply does not have access to the capital, as its shareholders do not have the money. Kupriyanov said that: "...When we come to Moscow, people regard us as heroes. Out of 18 small air operators of the Moscow region, 12 are on the brink of bankruptcy, others sell aircraft to pay off taxes. We are among two or three who still have their aircraft, their maintenance base, and have kept together their pilots and mechanics." Kupriyanov did concede that such relative health had been achieved at a cost, with the workforce reduced from 700 employees in late 80s, to 160 today. Wage levels at the airport still remain relatively high, by the standards of the region, with an average monthly wage of Rb2000. He claimed that the airport, despite mounting competition and the insolvency of many of its customers, operates profitably. The main source of revenue, however, is from its fleet of 10 Mi-2s and Mi-8s, which operate in the oil regions of Northern Russia and, according to Kupriyanov, bring up to Rb500,000 for 20-day lease periods. The company's helicopter fleet has however, substantially declined over the last year, from 28 aircraft in mid-1998, according to some reports. Additional revenues for the airport are generated from leasing buildings on the airport, fuel storage and renting its largest hanger. Airport vehicles are also used to generate revenue and up to 30 are rented out. Levtsovo's maintenance base is certified to undertake maintenance for third parties and provides such services to other regional airports and private air operators. Given its proximity to Moscow, and 30% lower costs, the airport has attracted operators from Vladimir, Kostroma and Ivanovo.

Article ID: 865