VLM AIRLINES, N. V.: Luchthaven Gebouw, B50, Deume, B-2100, Belgium; Phone 32 (3) 230-9000; Fax 32 (3) 281-3200; Http://www. vlm-air. com; Code VG; Year Founded 1992. This third-level commuter, the name of which translates to “Flemish Airlines” in English, is established at Wommmelgem on February 15, 1992 to offer scheduled services to local and regional destinations, largely in support of oil, chemical, finance, and shipping interests. Organizer Freddy Van Gaver, former Transavia Holland, N. V. managing director who is currently a tire, fruit, and vegetable dealer, is appointed managing director and he recruits a workforce of 40.
Two leased Fokker 50s, formerly flown by Busy Bee of Norway, A. S., are obtained and employed in 1993 to begin, on May 17, four-times-per-day roundtrip revenue flights from Antwerp International Airport to London (LCY). The same scheduled service is introduced between Rotterdam and London (LCY) in April 1994.
As traffic improves, another Fokker 50 is acquired early in 1995. During the year, the Flemish government provides VLM with an interest-free, unsecured BF 20 million ($680,000) loan. British regional CityFlyer Express, Ltd. complains to the EU Commission that this action is anticompetitive state aid, which is illegal under EU guidelines.
Enplanements total 114,048.
The workforce stands at 95 in 1996 and the company now flies 4 Fokker 50s. During the first quarter, the EU Commission agrees with CityFlyer Express, Ltd. that the Flemish government loan to VLM constitutes state subsidy. It rules that VLM must pay market rate interest to the government, backdated to the date of the loan, but rejects the British call that the loan be secured or repaid.
In April, VLM pioneers the first-ever scheduled services from Dus-seldorf Express Airport at Monchengladbach to London (LCY).
Markets visited by VLM at the end of the year include Antwerp, London (LCY), Dusseldorf, and Rotterdam. Customer bookings soar 29.6% to 162,000. On revenues of E 14.8 million, an E 2-million loss is suffered.
Airline employment is increased by 22.2% in 1997 to 110. Airline employment is increased by 22.2% in 1997 to 110. To help redress the previous year’s fiscal downturn, Constellation International Airlines, S. A. Executive Vice President Christian Heinzman is brought in to become the new managing director. Among his first moves is to drop such unprofitable routes as Rotterdam-Munich and to start new ones, including Rotterdam-Manchester. Ad hoc charter flights are started and flown on behalf of such multinational corporations as BMW, Phillips, and Hannover Messe.
On July 1, the carrier signs a code-sharing agreement with Deutsche Lufthansa, A. G. In addition to shared marketing, sales, and customer service activities, the German major will purchase blocks of seats on 104 weekly VLM flights from Dusseldorf Express Airport and Rotterdam to London (LCY).
The compact with DLH is expanded on September 1 to allow daily dual-designator frequencies between Antwerp and Munich.
Passenger boardings soar 21.2% to 205,000.
Rotterdam to Manchester service starts in September 1998. M2 Communications in the October 14 issue of its In the Industry Internet news roundup notes a company promotion. During the month, the carrier’s business-class passengers passing through London (LCY) are entitled to a free shoe shine.
VLM, in November, is the first carrier to begin flights from Luxembourg to London (CTY).
Late in the year, an updated homepage is opened on the Internet’s World Wide Web. The fleet now includes 7 Fokker 50s, which transport approximately 250,000 passengers on the year.
With the beginning of the new schedule on March 28, 1999, service is inaugurated from London (LCY) to the Island of Jersey. Saturday and Sunday flights are inaugurated on April 17 between Rotterdam and the Island of Guernsey; a Wednesday service is added during July.
The carrier’s weekday Fokker 50 return service between London (LCY) and Jersey becomes twice weekly at the end of October.
Orders are placed with British Aerospace on November 15 for a pair of Avro RJ85s. As the year ends, VLM turns down an offer from Deutsche Lufthansa, A. G. to become a “Team Lufthansa” franchise partner and the two concerns end their 2-1/2-year collaboration and code-sharing flights.
Passenger boardings jump 19.9% to 320,000. Revenues of E 40.5 million are generated, as is an E 1.4-million net profit.
A total of 220 workers are employed at the beginning of 2000, a 29.4% increase over the previous 12 months.
At this time, the company undergoes a complete corporate makeover. The carrier is renamed VLM Airlines, N. V. Under an E 285,714 contract with Tilburg, the Netherlands-based Lila Design Aviation, a number of other changes in styling are made. Yellow and black, the official colors of the Flanders region—and the airline—are replaced with deep blue and gold, while the company’s logo, a lion symbol, and aircraft livery are revitalized. Aircraft cabins are all given a new look with gray leather seats and dark blue wool carpets.
In February, the 500,000th passenger is transported between Rotterdam and London (LCY). During the record-achieving flight, Deutsche Bank executive David Clarke is named the historic passenger and is presented with a magnum of champagne and a box of Belgian chocolates.
Daily (except Tuesday and Saturday) Fokker 50 roundtrips are resumed on April 8 between Jersey and London (LCY). Beginning in May and for the summer only, weekly Fokker 100 charters are operated from Jersey to Humberside.
Early in December, VLM is again licensed to operate summer flights from London (LCY) to Jersey. The move had been opposed by British European Airways, Ltd., which claims to have lost ?250,000 since July operating its own service over the route. On December 18, it is announced that Managing Director Christian Heinzman will depart on February 1 to become CEO of the Luxair Group; he will be succeeded by a KLM (Royal Dutch Airlines, N. V.) regional manager, Paul Johannes.
Also during December, the two ATR42-320s of European Air Express, GmbH. must be grounded at Moenchengladbach owing to incomplete maintenance records dating back to the time when they were operated with Zambia Airways Corporation. In the interim, the company leases several aircraft, including a Fokker 50 from VLM.
VNUKOVO AIRLINES (VNUKOVSKIE AVIALINII): Russia (1992-2001). When Aeroflot Soviet Airlines is reformed in early 1992, this longtime directorate, based at Moscow’s Vnukovo Airport, becomes one of the first autonomous divisions of the new Aeroflot Russian International Airlines (ARIA).
Noted for its introduction of such aircraft as the Tupolev Tu-154 and Ilyushin Il-86, the organization continues to provide scheduled frequencies to the southern areas of the former U. S.S. R. and adds ad hoc international charter services. V. V. Baranov is general director and oversees a fleet that includes 22 Il-86s and 58 Tu-154s.
Enplanements total 3,292,767, a figure slightly more than half the number flown in 1990.
The State Privatization Committee allows the carrier, in March 1993 to be reconfigured into the Vnukovo Civil Aviation Production Association; the $12-million Aeroflot Soviet Airlines debt is carried forward. Shortly thereafter, the new body is divided into an airport and Vnukovo Airlines. The process of division continues in May, with the airport becoming a separate joint stock company.
With 3,000 employees, the airline company is given the association’s aircraft and engineering and technical department. The Russian government requires the company to provide services to remote areas and Il-86 flights are undertaken to Pevek, Nadym, Igarka, and Norilsk, the latter in competition with the new Transaero Airlines. With fuel shortages causing its aircraft to be frequently grounded at Krasnoyarsk, Vnukovo must arrange to ship 1,000 metric tons of fuel to that city to cover operations during the quarter.
International service begins with inclusive-tour flights, called “scheduled holiday charters,” to Korea, Greece, Cyprus, Turkey, and the Mideast. Only about half of the carrier’s aircraft are available during the peak summer travel period; the rest are grounded for lack of spare parts and mechanical problems.
In October, the carrier becomes the first Russian company to place the new Tu-204 into service. Although not certified, three units are allowed to fly domestic cargo routes as the carrier assumes responsibility for the airliner’s precertification test operations.
Late in the year, Vnukovo becomes the first Aeroflot unit to elect a new board of directors; former engineering department head Yuri Kashitsin is named director general, with Alexei Konstantinov as director of operations. In December, charters to the UAE become weekly. As the result of Russia’s economic downturn and a corresponding increase in the price of tickets, Vnukovo’s traffic falls.
Passenger boardings decline 53.1% to 2,150,730 while freight plunges 48.8% to 509 million FTKs.
The second Tu-204, with Perm PS90 engines, enters service during the spring of 1994 and the two units available will complete the type’s operational trials. The fleet now includes 33 Tupolev Tu-154B/C/Ms, 22 Ilyushin Il-86s, and 3 Tu-204s; the inherited Aeroflot domestic service is maintained and “scheduled holiday charters” continue.
In April, employees threaten a job action in July unless real progress is made on the long-delayed privatization of the airline. Consequently, the State Committee of Property (GKI) begins to provide the necessary assistance required to make the change. The airline’s capital base is established at 289 million rubles (worth $52 million in 1990, but only $150,000 by this summer), 28% of which are sold at discount to staff and retirees.
Another 29% interest is made available as part of a government voucher system giving every Russian citizen the opportunity to specify which former Soviet state property they wish to “claim.” This approach provides no equity, but does give the airline 7,000 new stockholders, none of whom hold more than 5% interest. The remaining 41.4% interest is to be sold in a 1995 investment auction.
Also during the spring, costs begin to rise dramatically, with fuel and air navigation charges in particular up astronomically. Beginning in May, for example, air navigation commences a yearlong upward spiral of 104 increases. Fuel rises from under $100 per ton to over $200 at most airports served. To improve reservations, the computerized reservations system is switched from the Soviet-made Sirena 2 to the Western Galileo system.
During the summer, a Tu-204, the first of its type to wear Vnukovo colors, is flown to and exhibited at the annual Farnborough Air Show in the U. K. The Kashitsin-led board is reelected by stockholders at the first annual meeting in December and plans are made to launch charter flights to Thailand, Dubai, Egypt and Spain. Also, a joint-venture contract is signed with Everest Catering for the improvement of in-flight food services.
Customer bookings slide 4.7% to 2,050,000, while cargo falls 13% to 443 million FTKs.
Airline employment is increased by 5.2% in 1995 to 3,708 as the promised investment auction is held. When the shutdown Turkish charter operator GreenAir, A. S. locates additional capital early in 1995, it is reborn under the marketing name ActiveAir, A. S. A Tu-154M is chartered from Vnukovo and is employed to resume charters at the end of March. Additional Vnukovo Tupolevs will be obtained.
A strategic agreement is signed with Aeroflot Russian International Airlines (ARIA) in mid-June that provides for cooperation and coordination of commercial policy. Aeroflot will be able to employ VA’s aircraft while Vnukovskie will be able to interline passengers on to Aeroflot international services.
At the beginning of July, the company receives government certification that will allow it to service and repair Russian aircraft of any type.
Later in the summer, Vnukovo and Transaero Airlines both lodge applications to become the second Russian carrier permitted to fly from Moscow to London (LGW). For Vnukovo, which will ultimately be unsuccessful in its bid, the route would be the first outside the CIS.
On October 10, the concern becomes the first Russian state-owned airline to complete its privatization, when it is acquired at auction by the trading company VIL. The little-known enterprise purchases a 41% stake for $150 million. The investment will be challenged in court by rival bidder Finvest. The challenge will not be successful and final shareholding will now be divided between the Russian Aviation Consortium (43.42%), employees (29.7%), the Ministry of State Propery (0.00034%), Universus (18.92%), and individuals (7.95%).
Meanwhile, ActiveAir, A. S. continues its European flights through the end of October, when it shuts down a second time—permanently. The Vnukovo aircraft are returned.
The carrier’s 54 aircraft transport a total of 1,981,345 passengers, a 7.8% decline. Freight, however, increases by 4% to 463.55 million FTKs. Operating revenues are $157 million, costs reach $153.1 million, and a pretax profit of $3.9 million is reported.
The workforce is reduced to 1,300 in 1996. When the airline’s new owners default, the government reacquires Vnukovo and sells it to the group that holds Moscow-based Oriol Avia. The two companies are combined, with Oriol’s management taking the senior slots in the “new” Vnukovo. An effort is now begun to acquire as much market share as possible through a policy of low-cost fares designed to force competitors off various shared routes.
On August 29, Flight 2801 is on its initial approach to Svalbard, on the remote Norwegian island of Spitsbergen on service from Moscow. The Tu-154M with 12 crew and 129 passengers (mostly Ukrainian and Russian coal miners and their families returning from vacation), collides into 2,000-ft. Opera Mountain Salbard at a point 6 mi. from the runway; there are no survivors.
The crash site is large and the search for bodies requires several days.
Customer bookings drop to 1,488,539 while 39.5 million FTKs are operated. Financial reports are not made available.
The fleet in 1997 comprises 22 Il-86s, 26 Tu-154Ms, and 3 Tu-204s. On February 9, the carrier performs a “jubilee flight” from Moscow to Mineralniye Vody to celebrate the twenty-fifth anniversary of the first Tu-154 service. Chief Pilot Capt. Yevgeny Bagmut, who performed the premier Aeroflot Soviet Airlines Tu-154 flight over the route on February 9, 1972, is joined by a group of former pilots and representatives of the Tupolev design bureau, the aircraft building industry, and the federal aviation department.
Scheduled markets visited include Anapa, Aktau, Antalya, Dunai, Hurghada, Igarka, Kalingrad, Kambala, Kemerovo, Krasnodar, Novosibirsk, Norilsk, Odessa, Samarkand, Sochi, Tbilisi, Thessaloniki, Ulan Ude, and Yerevan.
Charters are also operated to Athens, Barcelona, and Istanbul. On the subject of charters, it should be noted that on March 1, VAL signs a cooperative agreement with Moscow-based Intourist, a large and well-known travel agency and tour operator. Under its terms, Intourist will sell tickets for Vnukovo services and the airline will operate upwards of 700 flights on behalf of the agency over the next year.
It is reported in the September 17 issue of Delovoj Mir that the company will add 22 additional domestic flights by the end of the year. Meanwhile, it has also signed exclusive agreements with several tourist companies and local governments designed to help increase enplane-ments back up above the 2 million annual figure.
Late in the year, Alexander Klimiov is named deputy director general-commercial.
Passenger boardings slide 2.5% to 1,780,000, while cargo falls 2.4% to 20.6% million FTKs.
The low-cost strategy introduced by the “New Vnukovo” in 1996 has not worked; no competitors have been forced off any jointly flown routes and the plan has, by late spring 1998, caused Vnukovo significant financial distress. The fiscal decay, in turn, creates serious service and aircraft maintenance problems. During May, several Russian airports, fuel suppliers, and ATC centers demand immediate payment of 80 million rubles that Vnukovo owes. The airline cannot pay because Russian ministries have yet to reimburse it 217 million rubles owed for tickets.
By June 9, eight aircraft are out of service for lack of spare parts and the airline is experiencing significant flight delays.
Tateros Surinov becomes the new director general and invests substantial equity in the enterprise. During the summer, the carrier loses 40 million rubles in lost business and its employees suffer wage delays.
Russian air transport, like other elements of the economy, encounter rocky times after the government devalues the ruble in mid-August. Airlines begin to fix their own rates, pegging tariffs to both rubles and U. S. dollars, even though the official Central Bank exchange rate is 7.86 rubles to the dollar.
Although the carrier does not immediately raise its domestic ticket prices it does, beginning on August 26, sell its international flights at a rate set and announced by the Transportation Clearing Chamber.
By mid-September, the exchange rate has plunged and currency trades at 16 to 1. This carrier, like many others across the nation, is forced to sharply increase some economy-class fares on their busy domestic routes. Even so, the new fares are still cheaper, in terms of dollars, than they were before the crisis. Vnukovo, for example, increases its one-way fare to Moscow on September 22 to Tomsk, Yekaterinburg, Krasnodar, Blagoveshchensk, and other points.
The fare boost, together with a worsening Russian economy, causes load factors to plummet. On November 2, the carrier indicates that it is reducing domestic ticket prices by 60%-70% through the remainder of the year.
Customer bookings fall another 6.7% to 1.55 million, while cargo traffic plunges 55% to 14.68 million FTKs.
The fare-cutting gambit results in substantial additional losses by the first quarter of 1999. The company’s shareholders are not pleased.
Several relief plans are tried, including the transfer of many services to Domodedovo Airport and the introduction of charter flights from Sheremetyevo-1. In March, plans are announced for a merger with Siberia Airlines (Sibir).
Preparing for departure from Al-Ghurdaqah, Egypt, on May 1, a company Il-86 with 350 passengers is seized by Egyptian authorities tired of Russian airlines not paying their fuel and landing fee bills. Those aboard are accommodated in two resort hotels. The Vnukovo Ilyushin is one of 12 planes from different companies held for nonpayment of fuel and ground servicing provided by the local Tiger Aviation Service. Following long and difficult discussions between the Russian Embassy and Tiger, the company, on May 14, agrees to release 11 of the 12 planes. The Ilyushin, however, is held three days until Tiger receives a letter from the Russian Federal Aviation Service guaranteeing that Vnukovo will settle its $350,000 invoice. The airline is now $20 million in debt.
Director General Surinov becomes nonexecutive chairman on May 19 and Vladimir Roubtsov, a former high official in the Soviet Civil Aviation Ministry, takes his place with a mandate to halt the fiscal hemorrhage. Demanding payment of four months back wages, the company’s 300 flight attendants threaten to strike on June 18. The event does not occur as the airline indicates that it is prepared to employ contract flight attendants from other airlines.
On July 1, Siberia Airlines (Sibir) MD Vladislav Filov is named DG of Vnukovo and begins an attempt to run both carriers prior to their merger. At this point, Vnukovo is a shadow of the “New Vnukovo” of 1996-1997, with only six destinations served by three or four daily roundtrips.
Following a one-day symbolic strike in July, company employees on August 5 vote for a full job action beginning on August 15. Preparations for a strike by maintenance and ground staff continue apace; on August 11, the media reports their suspicions concerning a possible desire by the airline to shed its maintenance capability. By now, salaries for the airline’s 3,000-man staff are five months in arrears. To make matters worse, fuel prices have risen substantially; by the end of August, aviation kerosene is selling for $200-$240 per ton in Moscow. Fuel prices for the year will increase four times.
After six weeks with Vnukovo, Sibir MD Filov realizes that Vnukovo’s financial, personnel, and fleet problems are too significant to allow for an early amalgamation of the two carriers. After putting in place a number of small reforms and instituting joint services over several common routes, Filev resigns from Vnukovo. Returning to Sibir, he indicates that, if Vnukovo is able to overcome its problems on its own, a merger may be possible in the second quarter or later in 2000.
In the turmoil surrounding the sacking of the carrier’s DG and his replacement, the strike by ground and maintenance personnel is stalled until mid-September. Meanwhile, the Vnukovo board of directors turns to businessman Alexander Krasnenker, the former commercial director of Aeroflot Russian International Airlines (ARIA), and asks him to come aboard on October 1 as Filov’s successor. Krasnenker is the seventh DG at Vnukovo Airlines in the last three years. Deputy DG-Com-mercial Alexander Klimov is named first deputy DG.
About this time, the company, like other airlines, releases its first half figures. These show customer bookings down to 600,000 and revenues of less than $2 million a month. For September alone, only 52,000 passengers have been flown.
At Vnukovo, Krasnenker launches a restructuring program on October 25 with a RIF of personnel. A number of unprofitable routes are either closed down or flown irregularly. The new DG is able to talk the CEO’s of Moscow’s airports into freezing old debts for airport services. He is also able to obtain just enough credit to begin the restoration of 13 aircraft, the bare minimum required to operate regular services. Difficult finances will make further improvements problematic.
To make matters worse, Russian investigators, on October 16, accuse Messers. Boris Berezovsky and Nikolai Glushkov, the latter formerly deputy DG of Aeroflot Russian International Airlines (ARIA), and new Vnukovo CEO Krasnenker (regarded as a Berezovsky’s protege du-ing his time at Aeroflot) of taking $400 million of the national airline’s profits and $200 million in air traffic fees, which are hidden in Swiss companies and then laundered.
It is reported on November 16 that Siberia Airlines (Sibir) and Perm State Air Enterprise have joined together in a concentrated effort to acquire part of the 25% market share held by Vnukovo in the Ural and Siberian markets.
Customer bookings for the year as a whole plunge 43.5% to 934,000, while 209 million FTKs are operated. A net loss of $30 million is suffered.
The workforce at the beginning of 2000 totals 1,300. At the beginning of the year, only two Tu-204s are operational. The other five are half-experimental aircraft which the builder had turned over to the airline after the conclusion of a test program. Fuel costs for this airline, like others in Russia, is now so high that it accounts for almost 50% of ticket prices.
By the end of February, the company’s on-time percentage has risen to 93% from 20% or less six months earlier. With the beginning of the summer schedule at the end of March, new three class cabins are available on all scheduled flights; all-economy seating remains only on charter flights. Vnukovo remains the only airline operating scheduled flights from all three Moscow airports: Vnukovo (17), Domodedovo (16), and Sheremetievo-1 (6). The scheduled services from the latter point are new.
During the spring, the company transfers even more services from Domodedovo Airport back to its home base at Vnukovo Airport. An agreement has been reached with East Line Group, which owns both Domodedovo and East Line Airlines, that the facility will be employed as a transfer center for foreign passengers flying, via Moscow, to Siberia and other Russian and CIS destinations.
The Moscow Times reports on June 27 that DG Krasnenker had been on a list of candidates for seats on the board of Aeroflot Russian International Airlines (ARIA). Krasnenker had been ousted from the board in 1999 and will not win appointment now.
The first of eight Yakovlev Yak-42Ds enters service on July 7. While en route from Moscow to Yuzhno, via Bratsk, on July 11, an Il-76’s wing supposedly suffers mechanical problems. An emergency landing is made at Bratsk, but no significat difficulties are found. ATu-134A, chartered from JSC Alania Leasing Company, enters service during the last week of August.
On September 4, Aviazapravka-Norilsk, the fueling company at Norilsk and Tolmachevo Airports, warns that Vnukovo’s debt may force it to stop refueling the airline’s aircraft. Without payment, the pumps are turned off at those locations on September 11. The airline, with a major cash flow problem, is forced to begin making some kind of payment.
As the result of an August meeting between deputy prime minister Tariq Aziz and Russian president Vladimir Putin, a decision is taken by the two governments to shortly resume air services. On September 14, Aeroflot Russian International Airlines (ARIA) regional representative Pavil Piryatku announces the new arrangement, noting that his airline will reopen its Baghdad office in mid-October.
Papers are also signed between Iraqi Airways and Vnukovo Airlines concerning the inauguration by the latter of regular Iraqi flights. Additionally, a pre-contract agreement is reached between the two that, once the matter of sanctions against Iraq has been resolved, may see Vnukovo selling as many as 10 Tu-204s to Iraqi Airways.
After obtaining clearance from the UN Sanctions Committee, a Russian delegation of business and political representatives, led by Central Fuel Company chairman Yuri Shafranik, a chartered Yak-42D arrives at Baghdad on September 17, following a direct flight from Moscow. Shafranik is also president of the Committee for International Scientific and Business Cooperation with Iraq, which has arranged the three-day visit.
Making the first airline flight to Iraq in 10 years, a Vnukovo Tu-134A, transporting humanitarian supplies, a delegation of Russian politicians, and a youth footbal team arrives at Baghdad from Moscow on September 23. On September 29, a chartered Tu-154M flies 120 passengers, including members of the Council of Europe parlimentary assembly and its speaker plus 11 Nobel prizewinners, and another shipment of humanitarian aid to Baghdad from Paris (CDG). As was the case with the two previous flights, it is met by Iraqi deputy prime ministers Uasom Ramadan and Tariq Aziz. The group will attend a conference marking the 10th anniversary of the introduction of UN sanctions against Iraq.
By the start of October, Vnukovo is making some progress on paying down its debt and is, reportedly, actively repaying its residual fuel debts to the Norilsk and Tolmachevo airport providers. Still, fuel supplies from some sources remain suspended and access to certain other airports because of debt has been restricted. The pressing cash flow problems remain.
Still with the cloud of his former mentor Boris Berezovsky hanging over his head, DG Krasnenker resigns as CEO on October 9, while retaining a seat on the Vnukovo board. The airline PR department reports that Krasnenker believes he has accomplished the goals set forth for him in his one-year contract and that Vnukovo is well on the road to recovery. He is succeeded on an interim basis by his deputy, Alexander Klimov.
On October 13, the Russian newspaper Kommersant reveals that Director General Krasnenker had stepped down because of a “misunderstanding” with Tatevos Surinov, director general of Vnukovo’s owner, the Russian Aviation Consortium (RAC) and himself formerly director general of the airline. Disagreements over cash flow, policy, and the Berezovsky relationship are pointed to as being at the core of the falling out. When reporting the same story, Russia Today says that the real cause was a decision by RAC to sell the Vnukovo subsidiary Centreleasing, which owns 19 of the airline’s 25 operational aircraft, to an undisclosed third party, thereby stripping the carrier of its principal assets. The board’s expenditure of $20 million “for other purposes” is also viewed as a contributing factor.
The press, quoting the Iraqi news agency INA, reports on October 12 that Vnukovo will start a four-times-a week roundtrip charter service on October 27 between Moscow and Baghdad. Deputy Chairman Alexei Sap-kin plays down this version, which has understandably upset U. N. officials, and indicates that any Vnukovo flights are strictly for humanitarian purposes and that no regular flights will resume until the airline receives clearance from the Russian foreign ministry. Vnukovo operates another Tu-154M service to Baghdad on October 27. This aircraft also transports relief supplies, as well as a delegation of Russian businessmen to a trade fair. An ll-86, with 255 passengers, arrives at Sadam Airport on October 30.
While en route from Makhachkala in Dagestan to Moscow on November 11, a Tu-154 is hijacked by a man carrying a bomb (which will later turn out to be a blood-pressure gauge), who orders the Tupolev flown to Israel. Following a refueling stop at Baku, the jetliner proceeds to the Mideast, where it is denied permission to land at Ben-Gurion Airport at Tel Aviv. The Russian airliner is, however, allowed to put down at Uvda, an Israeli air force base in the Negev Desert near Eilat, where the pirate turns himself over to Israeli police.
After Russian officials promise not to execute the pirate, Israel permits the plane, with its passengers and prisoner, to take off for Moscow on November 12. It arrives at Vnukovo Airport early the next day.
Dmitry Kalinichenko, director general of Aviazapravka-Norilsk, the fueling company at Norilsk Airport, proudly informs the press on November 22 that Vnukovo has paid all of its debt to the supplier. It has also put down $1,800 on account for future delivery—the first advance payment for avgas ever made by the airline.
Noting that salary payments had become almost regular under former Director General Krasnenker, but were nonexistent since August, 1,000 workers stage a one-day strike at the end of the month. Workers remain upset by the departure of Krasnenker and the board’s $20 million “for other business purposes” expenditure revealed in October. Acting Director General Klimov is able to find funds to pay all but 300-400 work-ers—enough to convince them to end their job action.
Former ARIA Deputy Director General Glushkov is put under arrest at Moscow’s Lefortovo Prison on December 7 on charges of fraud. Vnukovo Director Krasnenker is not summoned by prosecutors at this time. He does, however, resign from the airline’s board.
On December 20, the 300-400 workers who received no pay in November, including all of the carrier’s mechanics and engineers, go on strike demanding payment of wages not received since August. The workers’ union also demands that Vnukovo fully observe all labor laws and safety requirements. By now, only 2 of 50 aircraft are operational, with another 9 having been repossessed by creditors. VKO is $20 million in debt and heading downhill quickly.
In response to official concerns, the airline announces the next day that its schedules are being operated, but acknowledges that the workers at its maintenance and repair center at Vnukovo Airport are all out. Flight Operations Director Yuri Sytnik reveals that the negotiations with workers and their unions are progressing. He blames much of the difficulty on the Russian defense ministry, which has failed to make good on a 260-million ruble debt to the airline for the transport of military personnel. The work stoppage will continue until December 22.
An agreement is reached on December 23 under which Vnukovo will be taken over by Siberia Airlines (Sibir) in the biggest landmark in Russian civil aviation history since the breakup of Aeroflot Soviet Airlines. The State Service of Civil Aviation (GSGA) and the Sibir board of directors must approve the deal and there is no precedent in Russian law for the takeover of one major independent airline by another. There is also a law prohibiting the sale of state holdings that exceed $17 million in valuation.
Under the arrangement, if approved, Vnukovo will lose its identity and Sibir will cover its $17-million debt and pay the workers of both carriers for the 2 1/2 months required for integration. Of course, Sibir would prefer that the debt be restructured prior to amalgamation. The deal will provide Sibir with a strategic Moscow hub at Vnukovo Airport, 7 more Tu-
204-100s (among other types), and boost its route network to almost 200 cities. Beginning on January 15, Sibir will operate the Vnukovo schedules to Sochi, Ulan-Ude, Novi Urengoi, and a few other northern routes.
Arrangements are immediately completed for the $16.9-million purchase and delivery to Sibir, in February, of the first ex-Vnukovo Tu-204100. Upon receipt, the aircraft will be ferried to the Tupolev Aviation Technical Complex at Zhukovsky for further modernization and alteration prior to their joining the fleet in the summer. In addition, $7.18 million will be expended to purchase one Il-86 and eight Tu-154Ms; Vnukovo will apply the proceeds to its large debt. In addition to the Tu-204s, the Vnukovo fleet includes 22 Il-86s and 17 Tu-154s, but only 1 Il-86 and 5 Tupolevs are actually serviceable.
As anticipated, there is opposition to the potential merger from East Line Airlines and Aeroflot Russian International Airlines (ARIA), as well as from within the GSGA itself.
Enplanements for these 12 months total 905,200 and 189.1 million FTKs are operated.
The merger with Vnukovo will be officially reported on January 3, 2001. The GSGA, having heard all opponents, will approve this creation of the nation’s second-largest airline with Sibir, as promised, assuming responsibility for Vnukovo’s 500-million ruble ($20-million) debt. Following approval by Sibir stockholders on April 27, Vnukovo, Russia’s fourth largest airline, will be the first to disappear in the new year. Although the two will now operate as one entity under the Sibir name, actual amalgamation may require another year.
VOLARE AIR COMPANY: 2 Svyatoshinska Street, Kiev, 03115, Ukraine; Phone/Fax 380 44 452 1115; Http://www. volare. kiev. ua; Code F7; Year Founded 1994. This freight operator is established at Kiev in 1994 to operate regional and long-haul on-demand charters.
Under the direction of Director General Andrey Likarenko, a fleet of 5 Ilyushin Il-76TDs and 7 Antonov An-12s is assembled. Revenue flights commence and continue to destinations worldwide. Before the end of the decade, the carrier has agents in Belgium and the United Arab Emirates.
VOLARE AIRLINES, S. p.A.: 186 c. so Garibaldi, Verona, I-36016, Italy; Phone (39) 0445 800100; Fax (39) 0445 800101; Http://www. Volare-Airlines. com; Code 8D; Year Founded 1998. Businessmen in northeastern Italy establish Volare during the first quarter of 1998 to provide additional services as flights into the area by Noman, S. p.A. and TEA Italy, S. p.A. are reduced. Employing an Airbus Industrie A320-232 chartered from ILFC, President Gino Zoccai’s new nonscheduled concern introduces revenue services on April 1. Destinations visited from Verona, Milan, and Bologna are scattered throughout Europe and the Mediterranean and include Lourdes, Fatima, Tel Aviv, Amman, Cairo, and Sharm-el-Sheik.
SAirGroup, parent of Swissair, A. G., acquires a 34% equity interest in the start-up during September. Volare, in turn, begins to obtain its aircraft maintenance from the major’s shops in Zurich.
Plans are now announced by SAirGroup for the creation of a large European Leisure Group that will include not only LTU International Airways, GmbH., but also the Swissair, A. G. subsidiary Balair/CTA, Sabena Belgian World Airlines, S. A.’s subsidiary Sobelair, S. A., Crossair, Ltd., Air Europe, S. p.A., and Volare. The new arrangement, under the direction of project leader Stefan Helsing, is designed to be part of an integrated network built around the already existing “Atlantic Excellence” and “QualiFlyer” alliances.
Late in the year, a homepage is launched on the Internet’s World Wide Web and the fleet is enhanced by the addition of four chartered A320-212s. Orders are placed for five more leased units.
In 1999, airline employment reaches 200. Scheduled destinations visited from the main base at Verona and hubs at Milan and Rome include Rome, Milan, and Cagliari. Many European and Mediterranean holiday communities are also visited on a nonscheduled basis.
With the October 1 collapse of the British low-fare airline Debonair Airways, Ltd., the company is persuaded to dedicate two A320-212s to the operation of Swissair, A. G. replacement flights on the routes from Turin and Venice to Zurich. To provide lift for its charter program in the fall, Volare wet-leases a pair of A321-131s from the Turkish carrier Onur Air, A. S. on October 7. An A320-212 arrives under lease on December 8.
On February 3, 2000, an A320-212 arrives from GECA. With the beginning of the summer season at the end of March, Volare introduces daily nonstop A320 service from Alghero to Venice and Verona, from Bergamo to Olbia, from Naples to Verona, from Olbia to Bergamo and Verona, from Venice to Alghero, and from Verona to Alghero, Naples, and Olbia. Two more A320-212s arrive to help provide lift, one each on April 17 and May 7.
On July 12 , a merger agreement is signed with Air Europe, S. p.A. Plans are made to merge the carriers at a Venice hub into an as-yet-unnamed airline under the umbrella of the Volare Group, which is 49.9% owned by SAirGroup. Another chartered A320-212 is delivered on July 24.
Formerly operated by TAP-Air Portugal, S. A., another A320-211 is acquired under lease from GATX on August 1.
On October 29, Volare takes over the “Swissair Express” service between Venice and Zurich previously operated by Flightline, Ltd. with a British Aerospace BAe 146-200.
The year does not end well politically for Italy’s six major airlines. On December 22, it is announced that the government’s competition authority has unleashed an antitrust investigation into Volare, as well as Alitalia, S. p.A., Air One, S. p.A., Air Europe, S. p.A., Meridiana, S. p.A., and Air Dolomiti, S. p.A. Under review is a question of whether the six had an understanding on two domestic ticket price hikes that came on the heels of an earlier rise in fuel prices. In June, all of the carriers introduced a 10,000-lire ($8) fuel surcharge, following it up in September with a 24,000-lire boost.
As the year ends, delivery of a final leased A320, another Dash 211, is expected in March.
VOLARES AIR TRANSPORT (VOLARS AVIATRANST): 3rd Peschanaya Str 6, Moscow, 152252, Russia; Phone 7 (095) 157-4764; Fax 7 (095) 157-0961; Code OP; Year Founded 1993. Volare is founded at Moscow’s Sheremetyevo Airport in 1993 to provide worldwide ad hoc passenger and cargo charter services. V. N. Krykov is general director and revenue flights begin with a fleet that includes 3 Ilyushin Il-76s, and 1 each Il-62, Il-18, Tupolev Tu-154 and Tu-134, and Antonov An-12, An-24, and An-26.
Flights continue apace in 1994-1998. During these years, the fleet is reduced to 2 Il-62s and 1 each Il-18 and An-12. Although it is understood that this carrier continues to operate in the period after the beginning of the Russian currency crisis in August 1998, no definite information has been located to the effect.
VOLGA AIRLINES (VOLGA AIR COMPANY STATE ENTERPRISE): Volgograd Airport, Volgograd, 400036, Russia; Phone 7 (8422) 317 562; Fax 7 (8422) 317 785; Code G6; Year Founded 1992.
Following the demise of Aeroflot Soviet Airlines in 1992, its former Volgograd Directorate is reborn as Volga Aviaexpress Airlines. Nikolai Almazov is director general and he continues to offer scheduled passenger and cargo services to CIS and Russian communities employing a fleet of 5 each Tupolev Tu-134As, Yakovlev Yak-42s, and Antonov An-2s, plus 2 Yak-40s.
Service is maintained during the remainder of the decade. Airline employment totals 271 at the beginning of 2000 and the fleet now comprises 5 Tu-134As, 2 Yak-40Ks, 7 Yak-42Ds, and 6 Yak-40s.
VOLGA-DNEPR AIRLINES: 14 Karbysheva Str., Ulyanovsk, 432062, Russia; Phone 7 (8422) 201 497; Fax 7 (8422) 204 997; Http://www. voldn. ru; Code VI; Year Founded 1990. The Russian joint stock enterprise Volga-Dnepr, named for the major Russian rivers and based at the Ulyanovsk Aviation Industrial Complex some 425 mi. E of Moscow, had been formed in 1989 when workers demanded that the Gorbachev government “sell” to them several transport aircraft that it had been planning to place aboard.
Shareholding is settled on August 18, 1990 and is divided between JSC Aviastar, Antonov Design Bureau, and Motor Sich. A board of directors is established and Alexey I. Isaikin is elected director general. The company is registered as a joint stock company at Ulyanovsk on August 22.
The company’s first aircraft, an Ilyushin Il-76TD, arrives at Ulyanovsk’s Vostochny Airport at the start of 1991. It receives its first Antonov An-24-100 Ruslan from JSC Aviastar, as part of the primary shareholder’s stake, in early August. After a period of inactivity during which the Moscow government flounders, Volga-Dnepr receives Russian Air Operator’s Certificate No. 45 on September 16.
Volga-Dnepr is one of the first non-Aeroflot Soviet Airlines Russian carriers to begin free enterprise service when it launches domestic allcargo operations in October. By year’s end, the company is operating 3 of the 12 Ruslans it has been authorized to fly by the Ministry of Aviation Industry, as well as 3 An-12s, and 1 Il-76TD.
The workforce stands at 478 in 1992 as the fleet is increased to a total of 6 An-124-100s, 8 An-12s, and 2 Il-76s. The Russian Department of Air Transport provides over 70 licenses to operate domestic cargo charters, as well as flights to China and the U. S. With ethnic riots and political unrest spreading through Central Asia, a large number of former Aeroflot Soviet Airlines pilots from that region are hired.
During May, An-124-100s deliver Euro satellites from Rome to Cayene, in French Guiana, for launch into space; another machine transports 52 tons of gold, valued at ?230 million, from Abu Dhabi to Zurich.
While on approach to Skopje, Yugoslavia in a heavy storm on July 24, an An-12BP with 7 crew, crashes into a mountain 26 km. SE of its destination; there are no survivors.
Operations continue apace in 1993 as the company labors to expand its network of nonscheduled destinations. The employee population is boosted to nearly 700 and the company purchases 90 apartments for the rotating use of company flight personnel. A training division is now sanctioned and a significant investment in training is made, both in Moscow and at London; education at the latter point being provided by partner Heavylift Cargo Airlines, Ltd.
In January, a 90-ton, one-piece chemical reactor is flown aboard an An-124-100 from Venice to Omsk. Ruslans fly heavy road building equipment from Vladivostok to Polyarny in February. In March, a pair of 72.5-ton solar turbines is airlifted from Houston to Manchester and to London (STN) in England.
During April and employing a new double-deck car loading system, An124-100s fly 107 cars for the London-Sydney marathon from Turkey
To India and then on to Australia. In another Ruslan mission during the spring, the Italian subcontractor Alenia ships Boeing 767 parts from Naples to Seattle in an effort to make up for time lost in a labor dispute.
In June, the joint venture with Heavylift is extended for another three years; Heavylift Cargo Airlines, Ltd. continues to provide marketing services for the Russian freighter’s Antonovs, eight of which will eventually be positioned at London (STN).
An offshore-drilling-rig repair machine weighing 130 tons is flown by a Ruslan from Amsterdam to Perth, Australia, in September.
During the 12 months, Volga-Dnepr becomes the first Russian cargo airline to become a trustee member of the TIACA, the International Air Cargo Association.
Freight traffic accelerates 124% to 211 million FTKs and revenues skyrocket 130.8% to $74.8 million.
Early in 1994, the Mitsui Corporation becomes the airline’s Japanese partner. In February, an An-124-100 flies power station components, weighing 107 tons, from Naples to Karachi. Also during the first quarter, the Beijing government grants its authority for operations to and from China. Cargo charters are initially operated to Italy, Israel, and Hong Kong.
A road transport division (RTD) is set up with 10 large trucks in April to start “door-to-door” bonded freight deliveries in Europe. The same month, the company is registered with the International Air Transport Association (IATA). Three unique Ruslan services are completed in April. In the first, four Canadian Helicopter Corporation Bell 212s and their crews are transported from Vancouver to Mogadishu in Somalia. Two giant Pratt & Whitney PW4084 engines for the first Boeing 777 are flown from Hartford, Connecticut, to Seattle, while 70 cars participating in the London-Mexico City rally are flown from Lisbon to Sao Paulo.
The first RTD delivery to Germany is made in June. It is announced on July 1 that the fleet will be expanded from 6 to 10 An-124-100s and from 2 to 6 Il-76TDs. Tentative plans are also made to purchase a pair of Western freighters, possibly B-747Fs.
Antonov and the Russian aviation authority AviaRegistr fly a Ruslan in a certification program that achieves success with the U. S. FAA on October 13. The FAA, on October 14, grants authority for the initiation of scheduled cargo services by the Volga-Dnepr/Heavylift partners from Ulyanovsk and Moscow to Bangor, Maine, and Houston, beginning on November 30. In November, a 72-ton ship engine bed is flown by an An-124-100 from Hanover, Germany, to Memphis, Tennessee.
On December 19, a chartered An-124-100 flown by Heavylift Cargo Airlines, Ltd. takes a Soviet SA-10 Grumble SAM system from Minsk to Huntsville, Alabama, where it is turned over to U. S. officials. Il-76TD roundtrip scheduled flights, preparatory to the inauguration of expanded scheduled services next year, are started on December 28 from Moscow to Tianjin in north China
A total of 219 million FTKs are operated on the year and revenues are estimated to total $60 million.
Airline employment is increased 45% in 1995 to 1,067. In February, the RTD is certified by the Russian customs office to deliver cargo throughout Russia. On March 29, the airline’s maintenance division is certified as a repair station for An-12s, An-32s, An-124s, Il-76TDs, and Yakovlev Yak-40s.
In April, one An-124-100 flies four mobile television stations, built on Mercedes truck bodies, from Frankfurt to Seoul. Also during the spring, the Ruslan charter network is also stretched to India, the UAE, and Thailand. Chinese scheduled return service is inaugurated thrice weekly from Ulyanovsk to Shenzen and from Ulyanovsk to Dalian and to Shenyang employing Il-76TDs. An Il-76TD is now chartered from Magadan Airlines to help increase capacity on freight charters to and from China.
At the beginning of June, an An-124-100 transports three Kamov KA-32s from Ufa to Seoul. On June 20, Volga-Dnepr is awarded the “first and only Russian operator with an air carrier customs license.” The fifth anniversary is celebrated on August 19. Also in August, a 27-ton yacht is flown by a Ruslan from Genoa to Tashkent. In November, one of the giant aircraft transports an entire 104-ton Ford Motor engine production line from Valencia, Spain, to Cologne.
Cargo traffic this year increases 19% to 270.69 million FTKs and revenues climb to $87.65 million.
Unusual An-124-100 out-sized feats of 1996 are turned in during March. One plane flies an entire 81-ton Coca-Cola bottling line from Atlanta to Vladivostok, while another carries two one-piece turbines, weighing 80 and 26 tons, respectively, from Berlin to Jakarta. In May, a 95-ton compressor is taken in a single load from Zurich to Shanghai while in June, a pair of 90-ton gudgeons is flown from Ulyanovsk to Polarny for use in the diamond mines there.
A major customer recruited this year is British Petroleum (BP); in just the next two years, Volga-Dnepr will operate 100 flights for the energy giant, delivering over 10,000 tons. In July alone, a series of mass An-124-100 deliveries of up to 100 tons each, including one of 65 tons, are made for BP between Europe and Colombia.
In September, the airline is named a co-organizer of and official carrier for the Master Rally 96 off-road rally from Paris to Beijing. For the event, an An-124-100 is especially equipped with racks that allow it to transport 40 jeeps, each weighing 2.5 tons, and a number of motorcycles, from Paris to Ulyanovsk.
A seventh An-124-100 joins the fleet in October. Employing a Yakovlev Yak-40 trijet leased from bankrupt JSC Simbirsk Aero, Volga-Dnepr on November 1 inaugurates daily passenger roundtrips from Ulyanovsk, on the Volga River, to Moscow. These are the cargo specialist’s first noncargo operations.
In December, an An-124-100 suffers 50% hull loss when it crashes 12 minutes after takeoff from Ulyanovsk following the failure of its No. 3 engine.
Although freight haulage of the smaller An-12s and An-32s is off by 40%, overall cargo traffic rises 36% as 45,100 FTKs are operated. Operating income soars 27% to $111 million, making Volga-Dnepr one of Russia’s most successful companies.
Chairman/President Isalkin holds a press conference at St. Petersburg on March 22, 1997, and reports that although profits for the previous year were up by 5%-6%, Russia’s heavy new taxes had turned a net gain into a net loss.
In the spring, a Free Custom Zone is established at Ulyanovsk; the first joint venture partner within the project is the government of China’s Shanxi Province. In May, an An-124-100 flies a yacht from Sydney, Australia, to London (STN).
The board of directors, in July, elects Viktor Ilyich Tolmachov, the airline’s technical director, as its new chairman. He will briefly assume some of the duties of Director General Isaikin, who has been appointed chairman of the newborn Russian Association of Cargo Operators, in February.
A memorandum of intent is signed for four Il-96T freighters in September. Each will be equipped with Pratt & Whitney engines and Collins avionics for delivery beginning in the fall of 1999.
Also in early September, two An-124-100s, equipped with the doubledeck auto loading system, transport automobiles, jeeps, and motorcycles in five flights from Venice to Turkmenbashi on Turkmenistan’s Caspian Sea coast for Master Rally 97. Starting from Turkmenbashi, the marathon is run via Baikonur, Buguruslan, and Cheboksary to Moscow’s Red Square. The event is timed to coincide with the city’s 850th anniversary.
During October, the company is awarded an honorable diploma by the International Aviation Safety Association for five years of accident-free operations.
In the wake of a Russian military An-124 crash at Irkutsk on December 6, company officials announce that they will intensify control and inspection of their Ruslan fleet.
During the year, Volga-Dnepr flies 57.7% of all international shipments made in the heavylift/outsized cargo market.
A total of 26,220 passengers are flown and 209.6 million FTKs are also operated, which figures cover the actual 50,000 metric tons of cargo flown. An operating profit of $90.6 million is reported.
Service continues apace in 1998. The fleet now includes 7 An-124100 Ruslans and 3 Il-76Ts. Special missions continue to be operated with the Ruslan fleet.
Director General Isalkin is named chairman of TIACA’s CIS Chapter in February. Also during the month, the company is awarded the “Wings of Russia” prize as the best cargo operator in Russia. A pair of An-124-100s is contracted to fly the Irish rock group U-2 and its 200 tons of show equipment on a world tour to Buenos Aires, Melbourne, and Tokyo. On February 24, a Ruslan transports a 105-ton generator and its spare parts from Sydney to Auckland, New Zealand.
At the end of the month, the Russian Federal Aviation Authority names Volga-Dnepr Airlines as the top Ruslan operator in the country. It is ordered to head and unite efforts of all An-124 operators and manufacturers, as well as producers of aircraft parts and systems, to smoothly implement an Antonov program for the giant aircraft’s modernization.
On March 7, another generator, weighing 113 tons, is transported by An-124-100 from Perth to Auckland.
In May, the company patents the special car-loading system that it had introduced in 1993, allowing an An-124-100 to transport upwards of 40 jeeps or vans in a single load. The functional one-piece unit of a space station is flown from Moscow to Berlin during the month. Also in May, under contract to the UN, Il-76TDs fly a pair of 15-ton loads of humanitarian supplies to Freetown, Sierra Leone, one each from Brindizi, Italy, and the other from Luanda, Angola.
Under contract to BP in October and November, An-124-100s delivers 1,005 metric tons of oil refinery equipment from Baranquilla to El Yopal, Colombia, in 14 flights. Technical specialists test new loading equipment during this contract.
At the beginning of December, a Ruslan under a contract from the Tishman Spair Properties Company, transports a 73-ft. Norway spruce to Newark (EWR) from Cleveland, Ohio; the giant pine will be hauled into New York City to become the 1998 Christmas tree at Rockefeller Center.
Passenger boardings climb 7.2% to 28,000, while cargo traffic falls 7.7% to 193.58 million FTKs. Revenues total $98 million.
By the beginning of 1999, the workforce has been reduced by 29% to 760. For the second straight year, the company, in February, is awarded the “Wings of Russia” prize as the best cargo operator in Russia. Minsk joins the passenger network at the end of March.
During April, the company’s aviation engineering and maintenance operation at Ulyanovsk is certified by the U. K.’s Civil Aviation Administration. In late April, the airline is accused in the European press of having transported NATO armored vehicles to Macedonia on April 5, 7, and 8 as the alliance attack on Yugoslavia, brought on by the crisis in Kosovo, continues. The charge is hotly denied by the airline’s deputy managing director, Gennady Yeltsov, at a news conference on April 27. According to Yeltsov, the company had made three “humanitarian” flights into Macedonia on those dates, transporting tons of tents, sleeping bags, blankets, and foodstuffs. Another flight is operated the next day. Volga-Dnepr has been closely monitored by the Russian Federal Aviation Service throughout the Kosovo crisis and all shipments into Yugoslavia or the war zone have been coordinated by the Foreign Ministry.
Four Ruslans are certified as Stage 3 noise compliant by the Russian Federal Aviation Authority in May. One, under contract to the Curis Air Company, flies an 83.4-ton, one-piece industrial scrubber from Tulsa, Oklahoma, to Kuwait. In early June, another An-124-100 transports a 21-ton Angara 1 rocket from Moscow to Le Bourget Field, under contract to the Khrunichev State Space Centre, for display at the Paris Air Show.
The U. S. government contracts with the airline on July 28 for use of an An-124-100 to transport heavy material to Macedonia.
It is reported that the company has enjoyed an unusual level of business during the first nine months of the year, due to the political situations in the Balkans and East Timor and the earthquake in Turkey. These three locations alone have received numerous visits from contracted Volga-Dnepr aircraft.
On November 3, the company reports that its various humanitarian aid contracts have significantly boosted its income for the year’s first nine months. Additionally, it proudly claims for itself fully half of the world’s heavy lift market. In December, new maintenance facilities are opened at Shannon, Ireland, and at Sharjah, UAE.
Freight traffic for the year accelerates 32% to 254 million FTKs, with more than 85% generated by the joint venture with HeavyLift Airlines, Ltd. Revenues jump 25% to $104 million.
Airline employment at the beginning of 2000 stands at 726, a 0.5% decrease over the previous 12 months. Having resolved a number of manufacturing and operational conflicts with Antonov Design Bureau and its airline subsidiary Antonov Airlines, the two organizations begin to share technical information at the start of the year concerning An-124-100 civil operations.
Also during the first quarter, Volga-Dnepr and HeavyLift Cargo Airlines, Ltd. begin talks designed to find ways of deepening their joint venture relationship. One possibility discussed is an exchange of equity between the two partners.
On April 3, AeroWorld. net reports that since 1990, Volga Dnepr has filled 1,700 orders for An-124-100 service and used its 9 Ruslans to transport over 300,000 tons of cargo to 400 airports around the world. In late April, the Kaskol Group—a private stockholder group affiliated with the Russian defense industry—purchases a minority 16% stake in Volga-Dnepr with the express goal of boosting the carrier’s independent out-sized cargo offerings in the world market.
Beginning on May 19, the carrier introduces a new twice-weekly Euroasia Express Il-76T return cargo service from Prague to Beijing via Ulyanovsk and Novosibirsk. Another hush-kitted An-124-100 is delivered on May 25. During late spring and early summer, the company’s An-124-100s begin life-extension modifications; beginning with the first delivered on May 25, four will be on hand by the beginning of September.
The company celebrates its tenth anniversary on July 21 by accepting delivery of its tenth An-124-100. The huge new freight features improved crew rest areas. A $6-million credit from the Russian State Savings Bank Sberbank has provided the spur needed by the Aviastar plant at Ulyanovsk.
During the month’s first meeting of the airline’s new board of directors, Technical Director Victor Tolmachev is retained as chairman. The 10th new Ruslan is shown to the press at Moscow’s Sheremetyevo Airport on August 3.
Media rumors of a pending merger with the Antonov Design Bureau subsidiary Antonov Airlines are quashed on August 21. The next day, a $10-million, 4-1/2-year line of credit is obtained from Sberbank; it will be employed to complete hush-kitting and modernization of the existing fleet and to purchase another Ruslan. Three days later, the airline begins a new contract to deliver Tor-M1 antiaircraft missiles to Greece.
Other contracts filled during the first nine months of the year include the delivery of oil and energy equipment from Houston to Kazakhstan, Azerbaijan, and Russia, the shipment of emergency equipment to France, rescue helicopters to Mozambique, and additional contract missions to Sierra Leone and East Timor operated on behalf of the U. N.
In mid-October, an $8-million U. N. contract is received by Tyume-naviatrans (TAT) from the U. N. for the provision of helicopter support services in Eritrea. On October 23, a Volga-Dnepr An-24-100 transports four TAT Mi-8MTWs and 32 TAT employees to Eritrea to begin operating the mission.
During the fall and into the winter, discussions, begun months earlier and now often reported as “stormy,” are held between representatives of Volga-Dnepr and HeavyLift Cargo Airlines, Ltd. concerning the future of their joint venture. While HeavyLift seeks to maintain the marketing arrangement and the fifty-fifty split of costs and revenues, the Russian carrier, despite a lack of experience in the area, believes it is capable of undertaking its own marketing without the intermediation of the British carrier. It also sees little chance of the JV providing the amount of investment capital required for the purchase of additional An-124s, recalling that all of the loans so far obtained to purchase the first nine An-124s have been of Russian origin, with higher interest rates than might have been had from Western banks and institutions. The British, for their part, believe that investment opportunities they have arranged for the joint venture have consistently been turned down by its conservative, shortsighted Russian partners.
In this atmosphere, a number of options are reviewed, including a possible purchase of HeavyLift by Volga-Dnepr and an initial public offering, which could provide the fiscal backing to turn the joint venture into a full partnership airline and legal entity capable of acquiring its own finances, aircraft, and personnel.
World History
