Foreign involvement in Russian air transport

Published: 5/18/2000

Clintondale Aviation Inc has the distinction of being one of the few foreign companies that have become actively involved in the Russian air transport over the last few years. The US company is 50%-owned by two of the founding partners Yury Konovalov and Colin Hamilton, with the balance held by oil aviation services provider Petroleum Helicopters. The New York-based company has interests in a number of Russian air transport businesses including a 100% holding in Russian charter operator RusAir, which it founded in 1994, that carries business travellers using its small fleet of VIP configured Yak-40 and Tu-134. Counting among its customers oil and gas companies, investment banks, senior government officials and multinational companies. Clintondale also founded Kazakhstan-based Kazair West, in 1996, which operates a mixed fleet of 1 Let-1410UVP-E, 1 Mi-8MTV, 1 Tu-134 and 1 Yak-40. Clintondale also holds a major shareholding in New York-registered Sakhalin Air Services, which it co-founded in 1995, with offices in New York and Moscow and operations in Yuzhno-Sakhalinsk and Nogliki on Sakhalin Island in Russia's Far East. SAS provides air services to customers in the region using its AN-24RV and Mi-8MTV, with flotation equipment. The company also has interests in Hungarian charter carrier Aerotraders, which operates a Let-410 and has plans to expand its business to provide feeder services to the major airlines in the region. Clintondale and SAS have founded another airline, Aviashelf Aviation Company, which received its Air Operator's Certificate from the FSVT in October 1999. Since then, using its two Mi 8MTVs, the airline has been carrying passengers and goods, supporting offshore operations and providing medivac flights. SAS owns 40% of Aviashelf and Clintondale shareholder Petroleum Helicopters is supporting its development of the offshore business. Anna Golubeva, responsible for marketing at Clintondale, reported that the aviation company's associated companies made 729 flights in 1999, carrying 6,362 passengers, slightly fewer than in 1998. The reason for the softer market is attributed to the general uncertainty about Russia among the company's clients and some loss of business of local operators who are undercutting the Clintondale companies by some 20% according to Golubeva. There is competition from smaller Russian airlines prepared to get business at any cost, often leasing aircraft from existing Russian airlines and simply operating for the cash flow with little regard, in Golubeva's opinion, for safety. All Clintondale aircraft and operators are independently audited every six months using the format set by the Petroleum Industry's Exploration and Producing forum, Aviation Group. Clintondale operates a 24-hour service and if it does not have an aircraft available, then aircraft can be obtained from one of their selected, independently audited CIS operators, allowing them access to 30 aircraft at anyone time. The RusAir aircraft are described by Golubeva as being of medium age, but sources report that the Tu-134 and Yak-40 were built in the seventies, putting them at the long end of the Russian age range. Golubeva says however, that the aircraft are well maintained and properly operated and the London based insurance providers are suitably impressed by the airline's performance to allow a significant level of aviation cover. As a private company, the profitability of RusAir was not disclosed by Golubeva, but she did say they had been profitable in 1999 despite the problems with price cutting and higher fuel costs.

Article ID: 1786