Continuing tension between flag carrier and Sheremetyevo (317 words)

Published: 7/18/2001

317 According to reports all is not going well between Aerolfot and Sheremetyevo Airport with news that Valery Okulov General Director of Aeroflot has yet again threatened that he might move the airline or part of the airline's operations to rival Moscow airport Domodedovo. Given the reportedly strained negotiations between the two parties over the ownership of the new terminal three at Shermetyevo, the outburst is not entirely a surprise as Aeroflot knows that it is the anchor in the project and wants to emerge with the best deal available. The Shermetyevo management originally saw the deal as very much being its own during the initial discussions with Skanska, but subsequently Aeroflot have taken a strong line in participation down to the appointment of the project manager Bovis. For the airport's management the potential loss of lucrative revenues generated by the terminal is bound to be difficult pill to swallow. Okulov's threat to decamp to Domodedovo is not his first, and realistically is not particularly credible, although it must concern Sheremetyevo. For Aeroflot to move all of its operations to the new terminal at Domodedovo would be impossible in the short term as the move would have to await the construction of the second terminal planned by the East Line Group. Even a partial move would potentially present them with capacity problems at the developing airport. The move would also somewhat fly in the face of the airline's state strategy of building on its position as the dominant super regional player with a major hub, by moving away from the vast bulk of the international and for that matter domestic carriers. The argument does however; give some idea of the heated debate that is going on behind doors and the belief on the part of Aeroflot that it holds all the cards. Sheremetyevo are reported to have offered concessions by limiting the number of charter flights at the airport, presumably to reduce the airport's capacity problems.

Article ID: 2656