Russian travel agency comes to the rescue of struggling Moscow-based charter carrier (389 words)

Published: 11/8/2001

According to reports, Russian travel agency Natalie Tours has acquired Moscow-based charter carrier AJT International, although neither AJT nor Natalie Tours would comment on the deal. The news comes after considerable speculation over the financial condition of one of Russia's largest charter carriers, highlighted by a court decision against the airline in June 2001 in favour of Aeroflot, for unpaid bills of $400,000 relating to the supply of fuel and catering. The reason for the company's demise is primarily attributed to the very competitive Moscow charter market that has become increasingly tight with the entry of major regional carriers. This pressure led to AJT demanding “anti-dumping” regulations at the end of summer 1999 against regional carriers and its involvement in February 2000 to recruit other Moscow-based charter operators into the Association of Airlines of Moscow Transport Centre, in a bid to stop the deterioration of prices by closing out encroaching regional operators and driving prices up for travel agencies. Even the airline's inclusion on the list of authorised carriers after the Ministry of Transportation's restriction of charter carriers on high volume routes to vacation destinations during summer 2001(May - August) offered little respite, with its traffic reported to be well down. The airline has also been hit by the trend among Russians to fly scheduled as opposed to charter flights and the conversion of previously “regular” charter routes by major carriers, such as Aeroflot, into scheduled routes. Owned by its Chief Executive Teimouzaz Kaztchava and Vnukovo Airlines, now controlled by Sibir, AJT was the first of the independent airlines to emerge in Russia in 1992. The airline, that carried 490,000 passengers in 1999, offers Natalie Tours a fleet of four Il-86s and one Tu-154, the former aircraft reported to have had life extensions at VASO in late 1999. For Natalie Tours, the rationale behind the acquisition is no doubt to keep more of the margin through directly owning the aircraft, although the continuing competitive market, the age of the AJT fleet and its fuel economy makes this a less attractive proposition than it might at first sound. Recent concessions by the ICAO assembly on noise may, however, mean that the aircraft have extended their useful lives in servicing destinations in the Eastern Mediterranean.

Article ID: 2893