Mir Aeroflot initially targets the Russian Turkish holiday market (549 words)

Published: 4/5/2001

Aeroflot has unveiled its own tourist agency and announced its intention to corner one third of the Russian tourism market. The new agency, Mir Aeroflota (The World of Aeroflot), is to be headed by Andrei Kozlov a former Deputy Chairman of the Central Bank and founder of the Russky Standart Bank (Russian Standard Bank) along with Chairman of the new agency Alexander Zurabov, now Deputy General Director responsible for finance at Aeroflot. The agency according to Zubarov will focus on western standards of the service for holidaymakers offering themed activity holidays in a number of locations, focusing this summer season on: - Sun and Sea - Diving - Cultural cities - Golf - Ancient Civilizations - Adventure - Gourmet - Incentive Travel - Cruise The airline expects that the agency could potentially provided 3-5% more passengers for the airline on its scheduled routes, through its plans to acquire an ambitious 25-30% share of the holiday market within 3 years. The strong growth being generated though the weight of the Aeroflot name and through acquiring other travel agencies. One industry source estimated that the airline would have to invest at least a $1m a year to reach its goals of 30% share within the three year period, even with the Aeroflot backing. Aeroflot for its part has said that the agency will be treated the same as other agencies doing business with the airline, apart from having access to the Aeroflot frequent flier database and awarding air miles on its holidays. Industry sources however, say that the 300 agencies using the airline are somewhat skeptical given the market share ambitions of the airline. For Irina Tyurina, spokeswoman for the Russian Association of Tourist Agencies, it was yet early to comment on the new agency's ambitions. "Such declarations have been voiced by other companies before," The initial objective of the agency in 2001 is to get 25% of the holiday traffic from Russia to Turkey, which most of the agency's competitors believe is going to be very difficult, as the major operator TEZ Tour with 18% share believes that the market already has over capacity. The experience of other airlines in the foreign agency market to date has been Transaero with Transaero-tour that while still a small player is a major growth area for the private operator. The agency has agreed relationships with American Express and German travel agency TUI Group, with other deals being negotiated. The agency has also developed an arrangement with the General Director's and Chairman's former bank to provide finance for the agency's customers including loans for up to 80% of the value of the holiday payable off over 6 months. The bank has experience of offering such services to travel agencies and to other consumer outlets, but its close relationship with the principles inevitably raises questions about its appointment as a provider of such services. Russian Standard Bank is a closed joint stock company and is not required to reveal its shareholders, but is believed to be controlled by Rustam Tarkio through a company called RUST Inc. Tarkio's other interests include the major alcohol producer and importer Russian Standard. Zurabov left the bank soon after its formation and Kozlov left last year.

Article ID: 2467