In press reports of an airline conference in St Petersburg on the 24th of November,
Valery Okulov has been attributed with statements suggesting that Aeroflot was
looking at the possibility of creating a Russian airline alliance, and with
intimating that he had already started discussions with Russia's second largest
domestic carrier St Petersburg based, Pulkovo.
Aeroflot are however, a little more circumspect about the revelations, suggesting
that Okulov was simply inviting other airlines to cooperate with Aeroflot and
foreign airlines as strategic alliances became the norm in the industry. The
airline stressed that he was not proposing the creation of a Russian airline
alliance; something they were particularly keen to emphasise, should Aeroflot's
prospective alliance partners Delta and Air France "misinterpret" such comments
as not being entirely in the spirit of their current negotiations. Particularly
the reports from some of the Russian media, that Aeroflot's intention was to
create a super Russian airline to compete with foreign carriers.
The discussions with Pulkovo, according to the Aeroflot spokesperson, were
simply continuing talks about cooperation similar to those being conducted with
a number of Russian carriers, and was misconstrued by those reporting the speech
into something it was not.
Given the commitment of Aeroflot to joining the Air France/Delta alliance,
it would be foolhardy for Okulov to risk the smooth course of negotiations by
potentially suggesting that he was not negotiating in good faith. The development
of domestic partnerships, affiliates and the absorption of "stable " airlines
is a key part of the airline's strategy as laid out by Marketing Director Leonid
Mokhov earlier this year and in the McKinsey produced strategy presentation.
Agreements are already in place with a number of domestic carriers including
Pulkovo, Krasair, Sibir and Dalavia and carriers within the CIS such as Air
Kazakhstan. Whether this will add up to a super carrier in the longer term is
unlikely given the conflicting aims and ambitions of the major players.
Closer ties between Aeroflot and some of the carriers seem likely to develop
given common interests in such development. State owned Pulkovo's extensive
domestic network, with 60% of St Petersburg's air transport market, but with
relatively light capacity. Suggests a good fit for the development of relations
between the two carriers following agreements signed in December 1999, covering
unified routes, coordination of fares and schedules and potentially even exchangeable
frequent flier points. Whether this will develop into a closer corporate relationship,
we would argue is far to early to anticipate given the vigorous independence
of Pulkovo's management, particularly the aviation enterprise's General Director
Boris Demchenko. The development of relations however, seems likely to continue
given capacity constraints at St Peterburg's airport, particularly for international
travellers, and the desire of Aeroflot to feed its long haul network and that
of the alliance network beyond.
