Airline remains confident over longer-term prospects and continues to pursue merger with Tomskavia (757 words)

Published: 10/26/2001

State-owned Novosibirskavia, based at Northern Airport in the Siberian city of Novosibirsk, has announced development plans for its interregional routes in the Irkutsk region, with plans for the opening of new routes Novosibirsk - Bratsk - Lensk, Novosibirsk - Norilsk, Biysk -Surgut and Biysk- Nizhnevartovsk. The company is in the process of gaining the licences for the routes from Northern Airport, but some of the routes are already serviced, by both major and minor carriers: · Sibir offering direct flights for Tolmachevo Airport in Novosibirsk to Irkutsk three times a week, Samara three times a week and Orenburg offers a direct flight to Irkutsk once a week. · Tyumenaviatrans and SKOL offer flights to Biysk and Surgut . · Bryansk Airlines flies twice a week to Nizhevatovsk. Despite this, the company is still confident that the routes are viable given that in some cases the incumbents do not present much in the way of opposition, such as Nizhnevartovsk Airlines. Even so, the decision to go head to head with Tyumenaviatrans on major routes is a more interesting one and suggests that the airline may lose money before it builds passenger numbers. The airline, for its part, says that it can compete with flights to Irkutsk linked to its other flights, as intraregional flights are of no interest to the major carriers and it rates competitors Baikal and Angara Airlines as "weak", pointing out that Baikal is unlikely to start flying again having suspended operations earlier this month and Angara is actually operating Novosibirskavia aircraft and, it further claims, struggling to pay its debts. The airline is currently planning to reopen its profitable route from Novosibirsk to Lensk, in the Russian diamond-mining region of Sakha-Yakutia. The route was suspended five years ago after payment problems with the regional authorities. Novosibirskavia is also reporting robust numbers elsewhere, with revenues growing by 30% in September 2001 year on year, carrying 4,260 passengers during the month - an increase of 18% on September 2000 - on the airline's fleet of 12 An-24s, 12 An-3s and 10 Mi-8s. The fleet is, however, in mixed condition with some being grounded and others under repairs. Others are due to be disposed of, with parts from a small number of Mi-2s being used to barter parts for the rest of the fleet. On 9th October, Nickolai Petlin was confirmed as General Director of the airline: a post he had been filling following the death of Alexander Fleisher, on 18th August 2001 in a Yak-18T, preparing for an air show in Novosibirsk. He joined the airline from Tomskavia in May this year, where he was Deputy General Manager. The committee confirming Petlin's appointment, that included representatives from Ministry of Transportation (GSGA), Ministry of Property, Ministry of Labour and Ministry of Development was reported to have liked his programme for the company, including the development of the company's repair facilities, the sale of old aircraft, co-operation with other regional carriers and creation of an alliance of regional airlines. According to Novosibirsk's marketing manager, Dmitry Skosarev, the airline is continuing with earlier plans to merge with regional carrier, Tomskavia, although the process to proving to be more difficult that expected and there remains considerable doubt over the appropriate structure for the merged entity as well as concern on the part of the regional administration over the payment of back taxes by the respective entities. For the meantime, according to Skosarev, the airlines are considering issues such as code sharing, as this would give Novosibirskavia access to Tomskavia's ICAO code, although he maintains that an eventual merger would allow the airlines to compete against the much larger super regional, Sibiraviatrans, based in Krasnoyarsk. Tomskavia would add five An-24 s to the combined fleet and is in the process of overhauling two An-26s. Skosarev points out that having the government as its sole shareholder is also undermining the carrier's prospects, as it has received no help from the state and even the subsidies from the regional administration for intra regional routes have ceased. The management of the two airlines say that, consequently, they are in poor financial health, although Skosarev reports that Novosibirskavia has had periods of profitability. The airline currently flies from Novosibirsk to Novy Urengoi, Salehard, Nadym, Nizhnevartovsk, Noyabrsk, Salekhard, Strezhevoi, Surgut, Tomsk, Khanty-Mansiisk. The company also operates flights from Omsk to Novy Urengoi, Surgut, Nizhnevartovsk and Khanty-Mansiisk.

Article ID: 2858