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In the difficult situation on Russian air transportation market Vladivostok Air manages to stay up and to help its rivals in aviation business with fuel. Alexander Alekseev, OJSC Vladivostok Air Assistant General Director, Head of PR Department, speaks about the airline current business affairs.
— Mr. Alekseev, what is you evaluation of economic situation in Vladivostok Air in the view of the crisis in Russian airlines?
— Naturally, the airline has difficult times due to the general situation on air carriage market and double cost of kerosene. According to IATA expert forecasts by the end of 2008 many airlines all over the world will incur great losses caused by the bouncing prices for aviation fuel. The losses will amount to US 6 bln in total. Nowadays governmental taxes alone make up 25% of the air ticket cost for domestic flights, with the fuel component, which is up to 35-40% of the price, we can dream only about any profits from the aviation business. In these difficult circumstances our company tries to do its best to work without losses. I have to say, not all the airlines can cope with problem either in the country or abroad. Plus the factor of reducing demand for air carriage, usual for autumn and winter season. You can guess now what a hard time we are living through. I will mention however, that our efforts are appraised by many public organizations. For instance, on the 1st of August chairperson of Organization Committee of Entrepreneurship Development Assistance Fund, chairman of Expert Board, and chairman of Subcommittee for Public Private Partnership Development of State Duma Committee for Economy Policy and Entrepreneurship informed our company that we are the nominees for the Annual International Award «The Best Taxpayer of the Year».
— What does the company do to maintain economic stability?
— First, the airline is extensively renewing its air fleet with the more effective Tu-204-300 and A-320. Second, in the coming autumn season we are closing unprofitable flights and reducing the frequency of the flights on routes where the passenger flow is going down. Today we have prepared the flight schedule for the period from November 26th 2008 till March 29th 2009 and our passengers can get there tickets for our traditional routes without any problems.
— Vladivostok Air web-site periodically publishes information about flight cancellation. What are the reasons for the cancellation, economy or technical problems?
— The reasons? I would say they are of political nature. I would like to emphasize that Vladivostok Air is one of a few Russian airlines implementing the open announcements of flight schedule on its own official web-site. We do it to benefit the passengers' interests first of all. What is most interesting, from the very start our announcements have been interpreted by some mass media, who are not used to the open dialogue, as a notification of general reduction in the number of flights caused by «critical situation in the airline». However, for mass media even a routine technical fault in the aircraft indication system can be the reason for attaching a «critical situation» label to the airline. For greater persuasiveness we must remember here of the whole sorrowful history of our Russian aviation industry, but let's stop talking about incompetence and troubles.
Let's get back to our question. As you know, the season factor greatly influences the calculation of the number of flights in air carriage industry. It is not a secret for many that in summer we have an increase in demand for air transportation, while in winter the demand goes down. Every autumn the number of passengers normally decreases.
Flexibility of the air carriage market, influenced by many factors, shall also be taken into account. Let's take a flight to Sochi, for example. In summer season 2007 Vladivostok Air performed flights on Moscow — Sochi — Moscow routes on daily basis. We planned to double the flight frequency for our summer 2008 schedule on the route. Both the enlarged air fleet of the airline and the increasing demand for the flights contributed to the decision. However, emergence of a greater number of air carriers Moscow — Sochi — Moscow route in 2008 as compared to summer 2007 impeded the airlines from gaining minimum profits from the flights even in a traditional peak season (July — August). Therefore the decision was made to gradually reduce the frequency of the flights and to stop the flights altogether in autumn-winter 2008. We plan to use the released aircrafts for other profitable or just paying routes on the airline.
Another regular flight Vladivostok — Yuzhno-Sakhalinsk — Vladivostok is closely connected to the charter program for petroleum and gas industry staff on Yuzhno-Sakhalinsk — Tokyo — Yuzhno-Sakhalinsk route. Since the customer of the charter flights required cancellation of the flight on August 28th 2008, we adjusted our regular flights accordingly (for the single day). Vladivostok — Yuzhno-Sakhalinsk flight XF371 was not cancelled on August 27th 2008, we postponed it to August 28th 2008 instead. This was necessary to avoid unreasonable ground time in Yuzhno-Sakhalinsk for the period of cancellation of Yuzhno-Sakhalinsk — Tokyo — Yuzhno-Sakhalinsk charter flight VLK 8815/8816 and to use the aircraft more effectively for other programs of the airline.
— Along with publications on the airline official web-site, what other methods do you use to notify your passengers of cancellation or delay of your flights?
— In case of flight cancellation air carriage sale office sends a circulation letter to the agents who sold the tickets. The agents contact the passengers by phone and notify them on flight cancellation, they offer the passengers some close dates, rearrange their tickets or return the money. Air carriage sale office controls the number of the passengers not covered by the notification and takes additional measures to notify them.
Certainly, the most effective way to promptly notify passengers is our site and mass media. I will mention here that in July the statistics recorded the largest number of visits on our site — 78 thousand.
We used the new system for passenger notification of flights cancellation or delay a month ago, but not all the public layers proved to be ready for the innovation.
I am sure that our new service will be a worthy addition to the service range for our regular customers.
PR Department
OJSC Vladivostok Air
oso@vladavia.ru
