Estonian carrier ELK Airways finds that Russian fleet gives it better margins

Published: 10/26/1999

Estonian airline, ELK Airways, has been operating for the last eight years and has earned a reputation in the region for being well managed. It has grown substantially from its original fleet of three Tu154Ms and, from its early days, it was bringing in monthly revenues of $1.5m according to the company. Focussing on an all Russian and Eastern European fleet, Alexander Belousov, Chairman of ELK, rejects the idea of using Western aircraft, which are much more expensive, on the grounds of profitability, given that ELK's margins are 15-35%, compared to Western operators' 5%. ELK's 89 employees currently operate Tu-154Ms, Tu-134As and Bs, An-26s, Czech L-410s and has its own maintenance base with a good supply of spares for its fleet. It also plans to install US avionics and components in Russian helicopters. During its eight years of operations, the domestic market has accounted for only 30% of its flights. This is largely because the most lucrative offers for wet lease of the airline's fleet come from abroad, especially from countries with an underdeveloped aviation sector. It is also due to the fact that the Estonian government has historically taken a very conservative approach to the development of domestic aviation and has only recent focused on the development of the flag carrier Estonian Air. ELK is considering the opening up new routes and is currently negotiating the possibility of Tallinn-Bejing, in cooperation with Finnair. Although the airline has operated charter flights to destinations further a field in Europe and Africa in the past. Closer to home ELK is focusing on flights within 400 km of its home base in Tallinn, including cooperating with Aeroflot on the Tallin-St Petersburg route. The airline is currently building a technical complex including hangars, warehouses, maintenance facilities and a refueling base.

Article ID: 1014