Russian charter carrier continues to develop business

Published: 9/27/1999

The first independent Russian airline, AJT Air International, was founded in 1991. Owned by its Chief Executive Officer, Teimouzaz Kaztchava and Vnukovo Airlines, it has a fleet of six Il-86s and a Tu-154. The aging Il-86s are leased from the Il-86 producer, VASO, whose business is now almost solely made up of Il-86 overhaul, which for AJT's fleet reaching the end of its twenty-year life, offers strong support. An agreement signed by VASO with Vnukovo Airlines for life extensions of their Il-86s until 2005 may also offer further opportunities to extend the life of the AJT fleet. AJT is principally a charter company targeted at the medium price range and, in spite of the current market, AJT has managed to maintain its business by continuing to fly to destinations such as Rimini, Italy during the Balkan problems and operating during the 1998 financial crisis. It even reduced prices to Rimini by 15% when other Russian operators suspended flights. According to Serguey Gusak, Director General of AJT, the airline is focusing on the development of its branding in the Russian market, where it believes it has a high reputation for both value and integrity: a particularly strong position, given the record of some Russian charter airlines for leaving their passengers stranded. This has left the airline a firm favourite with travel agents, who provide the bulk of the charter passengers. In line with the rest of the charter industry, its Il-86s become profitable with a load factor of 85%. The airline's load factors of 90% and 100% in the summer months are however only achieved with nimble responses on the part of the management. Price dumping, particularly on flights to Turkey, is a problem that confronts AJT, courtesy of some of its competitors out of Moscow's Sheremetyevo-2, according to the airline. AJT's solution of an anti dumping convention, however, has received little support from other carriers.

Article ID: 907