May absorb Sayany Airlines by year end (550 words)

Published: 11/9/2000

Sibir has reported that between January - October 2000 it carried 712,164 passengers, 10% more than for the same period in 1999 and continuing the trend set in the January-September period which showed growth of 8% year on year.

The increase according to the company is attributable to the greater number of charter flights from Moscow and the opening of scheduled routes to Germany. The number of flights has therefore increased by 4.6% during the ten-month period. With load factor rising by 4.2% from 66.5% to 69.3%, reflecting, according to the management, the more efficient utilisation of the fleet. Cargo and mail for the period however, declined by 3% to 7,140 tonnes. According to Igor Volkov, the spokesman for Sibir, the focus of the airline on passengers and its lack of dedicated cargo aircraft, meant that the high passenger load factors fed into the space available for cargo reducing volumes overall. Volkov also suggested that the reduction of flights to Tianjin in China in favour of increasing flights to Beijing changed the mix of passengers. With business travellers increasing, as opposed to the shuttle traders who visit Tianjin, a major shuttle trading centre, and carry their purchases back to Russia on the carrier's aircraft.

As of November Sibir was operating 28 aircraft, including 7 IL-86, 11 Tu-154B, 8 Tu-154M, 1 Tu-204, and 1 Tu-134, with the fleet in the first ten months increasing its airtime by 4.4% on the same period of 1999. Sibir started operating its Tu-204-100 earlier this year on the Moscow-Frankfurt route, and reports carrying substantially more passengers compared the previous aircraft used on the route, the Tu-154M. The Tu-204 has also proved to be competitive on costs against the Tu-154, with lower operating costs than the aging airliner. The company however, did not discuss the full cost of the aircraft funded by a $15m loan from Sberbank, in contrast to the negligible cost of the Tu-154.

Sibir and Sayany Airlines

Commenting on the agreements between Sibir and Sayany Airlines originally signed In June 2000, Volkov said they cover two areas:

Ø The commercial agreement covering issues such as providing and developing transportation, increasing the efficiency of the 2 airlines

Ø The second covering Sayany appointing Sibir as its General Sales Agent for passenger and cargo transportation giving Sibir exclusive selling rights.

In reality Sibir operates Sayany using Sibir aircraft on its licenced routes and collecting the revenue by selling tickets under its own name on the airline's flights. Resulting in Sayany while still remaining a nominally independent company in reality becoming an affiliated company in all but name. According to Volkov Sayany's situation remains very complicated given its administration, but that Sibir plans to make Sayany a legal affiliated company by the end of this year or at the beginning of 2001. Sibir has also disclosed its operating results for 10mo00 excluding and including Sayany Airlines). Volkov however added that the next results would probably consolidate Sayany. Sayany addition to Sibir's operating results in the first ten months was 27,688 passengers carried on 308 flights. Its seat load factor was lower than Sibir's (66.3% comparing to Sibir's 69.3%), which resulted in lowering Sibir's overall seat load factor with Sayany is 68.9%. A substantive improvement on passengers' numbers reported in 1999.

Article ID: 2187