Airline plans further acquisitions

Published: 7/4/2000

State-owned Kavminvodyavia (KMW) is to take delivery of its second Tu-204 in early July according to Constantine Basov, the airline's Commercial Director. The carrier will purchase the aircraft, but Basov was reluctant to discuss the terms of the deal. The new aircraft will join the KMW fleet of one Tu-204, 14 Tu-154s and five Tu-134s. Earlier reports suggested that the airline is interested in up to six of the aircraft. The first Tu-204 was leased in December 1997 from Perm-based Avialeasing, after it had finished its five-year lease with Perm Airlines. Vasily Babaskin, General Director of KMV, commented that after some initial problems with the Tu-204 they are now quite satisfied and the aircraft is being used profitably on routes of over three hours. The airline is also reported to be considering additional aircraft acquisitions and is currently reviewing the Tu-334 and Tu-234, the former being their choice of replacement for the Tu-134. However, Basov said that the purchase would depend on the airline's finances when the Tu-334 becomes available. Based in the resort centre of Mineralnye Vody in the Stavropol region, the airline is one of the few Russian airlines that appears to be in rude health, having generated 60m rubles ($2.4m) of profits in 1999 while increasing its passenger volumes by 14%. For 2000, Basov said they plan to increase passenger traffic 40% through new routes and increased flight frequency, although he emphasised that any improvement was conditional on the continued stability of the Russian economy. The company currently operates routes from Mineralnye Vody, Sochi, Moscow and Stavropol to destinations in Russia, the CIS, Germany (Munich) and summer resorts in Greece, Cyprus, Turkey and Bulgaria. The later non-CIS destinations seeing seasonal increases in frequency to coincide with the summer season. Despite strong volumes on some of its foreign routes, such as Munich where it operates, with 100% load factors. Kavminvodyavia is still trying to lure Russians back to the Caucusus resorts, where the problems in Chechnya have dissuaded Russians, not surprisingly, from travelling to the spa resorts of the Stavropol region. In 1999 the state transferred Stavropol Airport to KMW from its owners since 1992, JSC SAAK, the regional airline. The state decided that the airport had been illegally privatised. SAAK then lost its flight license and is now under temporary management, with Gennady Russkikh, its General Director, fighting to get the licence back. Basov however, says that the airline has no aircraft and all its routes are now being operated by other airlines Using the airport, KMW plans to expand its routes from Stavropol to Murmansk, Moscow and Kaliningrad and is currently in negotiation with the Stavropol regional government regarding the airport's reconstruction over the next two years, with a hope for funding from the region. The airport was inherited in poor condition and in the first quarter of 2000, KMW had to spend around 2.5m rubles (around $1m) for urgent repairs. A project for which KMW hopes the region will provide financing. Mineralnye Vody Airport is also a part of KMW.

Article ID: 1910