RusAl's next move awaited (491 words)

Published: 5/18/2001

The Aeroflot AGM on 19th May might promise little beyond a future EGM, by way of identifying whether Russian Aluminium has taken a substantial share - possibly a blocking minority- in the airline, but reports of changes in the ownership structure have created waves elsewhere. Standard & Poor's (S & P) has placed its corporate governance scoring of the company under review, owing to the lack of transparency behind the reported changes and to potential risks for minority shareholders. S&P hopes that some of its concerns will be addressed at the airline's AGM. Since the agenda for the meeting was set two months ago, this is unlikely. Julia Zhdanova, airline analyst at United Financial Group (UFG) expects the AGM to be followed by an EGM, at which Valery Okulov, General Director will be reappointed given that his contract expires next year. However, she forecasts that Alexander Zurabov, Deputy General Director and a former banker, who is credited with positive changes at the company, may find his position less secure. He will depend on support from one of the two factions that are emerging in the form of the state and Russian Aluminium. In the case of Russian Aluminium, it is difficult to predict the agenda here, but some idea of its strategy should emerge over the next few weeks. For Okulov, the last few weeks have been an exercise in anticipating where the next attack may come from. This week, however, the source of the problem was transparently the industrial action from the airline's trade unions, which have always been extremely public in attacks on the General Director, having accused him of everything from corruption to mismanagement in the past. This time, the complaint appears to centre on a number of employment issues, including changes in working practices relating to long haul flights, cuts of up to 70% in travel allowances, individual employment contracts and performance-related pay, with a plan to strike by Aeroflot personnel. When asked about the strike at the end of last week, Aeroflot said that it had not been notified of any action. In the end, the strike action actually comprised a one-hour stoppage by engineering staff on the 13th April and a continuation of so-called US-style "soft strike" by cabin crew, involving 500 attendants taking sick leave over the previous week, reportedly orchestrated through a sympathetic web site. Vladimir Mamonov, invariably the union leader at the fore in Aeroflot disputes, said at a press conference involving the airline's three major unions, that the unions would meet to consider renewed action on 25th May, if demands for pay and better working conditions were not met. To add a little colour to his challenge, he also issued a press release claiming that the airline was bankrupt, with $500m of debt: a curious statement from a grouping seeking better terms and conditions from its employers.

Article ID: 2542