One the primary architects of change has been Vladislav Filev, soon to be General Director of the combined Siberia Airlines (Sibir) and Vnukovo Airlines (VAL). Under Filev's stewardship, Novosibirsk-based Sibir, a product of the fragmentation of the former Soviet Aeroflot, has moved from being a relatively obscure regional carrier to Russia's third largest airline though the merger with VAL, even if, as Filev recently admitted in an interview with business daily, Vedomosti, it is unlikely to be profitable in 2001.

In a sense, Filev is the embodiment of the new type of commercial manager within the industry and represents the core of individuals that will pull it out of its current morass. This is an industry in which it is not unusual for managers with commercial flair to be regarded suspiciously by colleagues who have little concept of the relationship between costs and revenue, nor the importance of this equation.

An industry outsider before the early 1990s, Filev has expanded Sibir by judiciously feeding on the problems and inadequacies of the managements of air transport companies, initially within Siberia and, lately, with Vnukovo Airlines. He has never really been interested in the pursuing the role of the all-encompassing air transport entity, controlling all aspects of both flight and ground activities, which distinguished much of the post Soviet system. As such, Filev has avoided becoming too intimately entangled in the ownership of airports from which Sibir operates, most notably Novosibirsk's Tolomachevo Airport, where, despite being on the airport's board and its biggest customer, Sibir has not been tempted to make a bid, even when the airport was reported to be available from the state in the middle of 2000. Filev has consistently argued that Sibir is in the airline business, and may even consider spinning off its maintenance interests.

He has also proved reluctant to acquire airlines outright and inherit the endemic problems of obsolete fleets, social commitments and chronic over manning experienced by carriers. Instead, he has preferred to make affiliated moves and cherry pick both aircraft and routes. This is most recently demonstrated in negotiations with Baikal, one of Siberia's walking wounded, which is in an extremely poor financial condition, but has interesting routes to China from Irkutsk and a number of reasonable aircraft. The impact of this approach has been to keep the Sibir's debt burden to a minimum, while steadily expanding its catchment.

Using this method of expansion has not always endeared the carrier to the regional authorities, which have seen the loss of local autonomy in air transport in a very unfavourable light. Filev's patience has tended to pay off and in most cases he has simply had to wait until the increasing debt burden and inefficiency of the regional carriers have given local authorities no choice but to succumb to his overtures.

Filev has therefore stepped onto the national stage with little of the grandiose aspirations of many within the industry and, as an outsider, carries little baggage, other than a thorough schooling in airline bottom lines - Russian style. His experience at Vnukovo, during the first efforts to merge the two carriers, has also suggested that he is not afraid to walk away from a deal, in order to get better terms or simply to wait until the potential target is more receptive to the type of change he finds appropriate.

While accepting that the merger of VAL may take up to two years, Filev has his sights set on yet greater heights. Since April, he has been negotiating with Aeroflot on broad cooperation in a number of areas, with a focus on participating in the joint development of the government leasing structures. The two sides are discussing contributing aircraft to the deal, with further investment being negotiated with financial holding company, Interros.

In the longer term, Filev says that he is interested in getting closer to the flag carrier, fuelling rumours of a potential merger. Filev does not dismiss this possibility and such a move would, in principle, make sense, given that Aeroflot's expansion of its domestic network is not reported to be an unfettered success and Sibir's international business remains small, despite an interline agreement with Lufthansa.

The question of whether the state, Aeroflot's controlling shareholder, would let this happen is hotly debated, as is the view of the airline's new shareholder, Roman Abramovich. Filev seems confident that he would gain the support of both sides and points out that he has sought to make sure that the state will retain its 25% holding, currently held in Sibir, within the new Sibir/VAL carrier.

There is no longer any doubt that Sibir is capable of making the switch from the regional to the national stage. Whether it can become Russia's leading domestic airline is less certain. But a future merger with Aeroflot may not be the best way of achieving this. Running roughshod over the desperate, in order to create a viable airline business when few others exist is one thing; merging with a business that regards itself as successful is another.

Filev, however, appears to have many options besides Aeroflot, including Sibir's relationship with Lufthansa and recent reports that the company may be invited to join the SkyTeam alliance. This all comes at a time when the industry is probably over the worst and when the pressing problem of fleet replacement may finally have a financial solution by the year-end.