- Vitaly Anatolievich, what can you tell about indicators of Vnukovo airport in 2011?
- Following the results of this year, we have come in fourth – we have transported 8,2 million passengers and serviced over 142,500 flights (approximately -13% and -5% respectively as compared to 2010). Some changes, which have taken place at the Russian air transportation market, have influenced these figures. Bankruptcy of airlines, mergers and acquisitions, withdrawals of Air Operator Certificates…As a result, some of the carriers have ceased the performance of flights from Vnukovo.
Moscow Airlines has stopped its activities in 2010. According to decision of Federal Air Transport Agency Kavminvodyavia and Continent airline have also stopped last year. Sky-Express and Dagestan Airlines have left, Vladivostok Air has decreased the volume of traffic due to transferring of stock of shares to Aeroflot and thus transferring some of its flights to Sheremetyevo. The same refers to Donavia.

- Nevertheless, the sag is not as significant as it could have been in this situation…
- The fact is that our primary carriers (UTair and Yakutiya) have significantly increased their volume of traffic. By the way, as against the airlines, which have stopped their activities, debtors and defaulters, UTair and Yakutia are paying. Yakutia is even making advanced payments and UTair has only four-day debt, taking into account their volume of traffic. It is a pleasure doing business with such well-handled companies, which keep increasing their traffic. It is also good for passengers, because the reliance of transportation is increasing.

- Anyway, the loss has been recorded. How big is it?
- About 3,7 billion rubles. Many factors have contributed to this result. Firstly, it is a technical loss in a great measure. Such are the rules for maintaining accounting records in our country. Taking into account the number of our new objects, we have high amortization charges. The second reason is expenses caused by decrease of passenger traffic. In addition we have recorded a great loss caused by debtors. By the way it is the salary of our staff (around 3000 employees) – people who are responsible for airfield maintenance, flight safety, power generation, which allows us working even under conditions of ice rain, and others. All these factors contributed to this loss.

- But anyway after the latest news we can make a conclusion that the airport has extensive plans…
- According to our forecasts, the passenger traffic of Vnukovo will increase in the next two years. It will become possible due to transfer of some airlines from Domodedovo airport. I expect Domodedovo to lose 8-9 million passengers in the next two years. And I can explain why. We remember how the airlines have massively left Sheremetyevo in 2002-2003 due to its over-crowding and moved to new-built advanced Domodedovo airport. Moscow did not have any better airport these days. But at present the next stage has begun: a new product enters the market - Vnukovo. The new Terminal A of Vnukovo airport is undoubtedly better than Domodedovo air terminal by all indicators. It is noted by everyone: passengers, airlines, etc. Let’s have a look at the figures. Domodeovo has only 170 thousand square meters of passenger air terminal. Vnukovo already has 200 thousand square meters of passenger air terminal and we will put into operation 100 thousand more in future.
Now let’s see other figures: last year Domodedovo has transported 25 million passengers on its 170 thousand square meters and Vnukovo – 8,2 million on its 200,000. All the airlines are assessing the comfort for their passengers. As the saying goes, fish seeks where it’s deeper and the man seeks where it’s better, and the airlines – where it’s more comfortable. That is why Vnukovo is much more interesting for them now. All the experts talk about it. And tomorrow the passengers will also think so, because some of the airlines have already taken some decisions.

- Which airlines will start flying from Vnukovo and when?
- We have already signed contracts with Lufthansa and Turkish Airlines and they will start their work in Vnukovo after the switch to spring-summer schedule. As for the border, the inter-departmental commission is currently underway. We hope to have all the necessary documents by March 1st and launch international flights from Terminal A on March 26th. In addition, we are negotiating with other companies. I have already spoken about “three airports – three alliances” strategy in spring. Sheremetyevo – «Aeroflot» and SkyTeam, Domodedovo – S7 and Oneworld, and Vnukovo – «UTair» and Star Alliance. And this strategy is currently being implemented.

- Is UTair going to join the Star Alliance?
- It is the question for UTair’s management. Joining any alliance is a serious decision. You remember how Aeroflot was joining the alliance. How long they have been preparing. I think, as a partner and colleague of UTair’s CEO, Andrey Martirosov, that his company is almost ready for it. The question is: does he really need it. Anyway, we already have one alliance. This alliance includes Vnukovo, UTair and Lufthansa.
Now we have to provide the highest level of comfort to the airlines. In particular, we have already implemented a number of programs, which improve the traffic control and airport’s resource management. My phrase may seem paradoxical but the decrease of passenger traffic was advantageous for us, because it would have been very hard to carry out such work with high passenger traffic. And in our situation passengers did not even notice those impercievable failures caused by putting new programs into operations.
Meanwhile, these programs allow saving a significant amount of finance, thus we may decrease the self cost and fares. So we will be more competitive than our colleagues, which do not have such programs. We understand that we need to lower the self cost as far as possible to give airlines the lower prices. In this case the low fares for the airlines will still be profitable for us. And we are working on it today.

- What other changes will take place in Vnukovo in the nearest future?
- We plan to invest about 5 billion rubles for completion of construction of the terminal and continuation of airfield service construction. We also need to invest about 280 million rubles in the fourth ramp, which is located near Vnukovo aircraft repair plant 400 (VARP-400) and is being constructed using Vnukovo airport’s own funds instead of federal ones. This ramp is intended for aircraft with long ground turn-around time. According to active rules, aircraft with ground turn-around time of three hours are serviced at the closest ramp and the ones with ground turn-around time of six-eight hours are serviced at the fourth ramp. Thus these aircraft do not consume expensive space at the closest ramp.
One problem still remains – incoordination between construction of the ramp, which was being built using federal funds, and the construction of the air terminal. Now it appears that we have completed the construction of the terminal using our own funds, but we cannot put its left part into operation, because the relief of the ramp in the near part of the terminal is 1.5 meters and in the distant one – about 3 meters. That is why we are unable to move jet bridges to the left part of Terminal A. As a result this wing is working by using buses and passenger steps since January 1st. That’s wrong, but we have nothing to do now.
Nevertheless, the following facilities will be put into operation by November 2012: runway №1 (after reconstruction), near part of the ramp, the second part of the Terminal and control tower, where towermen responsible for ground movement control and coordination of ground services will be located.
I am confident that we will be able to finish the reconstruction of aerodrome infrastructure thanks to decision against construction of a third runway. The capacity of Vnukovo airport will be 80 take-off and landing operations per hour since November 2012.
The total of 21 billion 800 million rubles have been allocated for reconstruction of Vnukovo, including reconstruction of both runways and stretching one of them by 500 meters, construction of extensive network of taxi strips, reconstruction of 400,000 square meters of Vnukovo-1’s main ramp with its expansion by 240,000 square meters, fitting the perimeter fence with advanced security facilities, etc. At that, I would like to admit that Domodedovo airport is asking for 27 billion rubles from the budget of Russian Federation only for construction of third runway!

- Are you going to pass the certification for A380?
- Absolutely. We are equipping apron №23 for A380. All the jet bridges have been completed except the 23rd one, because it will be adopted for double-deck aircraft – two sleeves on the first level and one – on the second. Gate 22 will be closed during maintenance of A380 due to its dimensions. We are acquiring Thyssen Krupp jet bridges for A380.

- In other words A380 may visit Vnukovo after switch to spring-summer navigation?
- No, I think we will start with some promotional events. We will demonstrate that it is possible and then we plan to start servicing the airlines in 2013.

- It has been reported last year that you have sold 50% of the refueling enterprise to Rosneft. Is it true?
- Yes it is. It is the country’s №1 oil company with heavy stocks of oil, with its own oil refining enterprises and advanced plants. Thus we have at least protected the airlines, which perform flights from Vnukovo, against the market fluctuation similar to the ones, which have taken place last year. Remember how often a dust has been raised about shortage of aviation fuel. At that I must admit that Vnukovo offers the lowest price among all the enterprises of Moscow Air Cluster.
In addition, we have constructed an alternative refueling enterprise. Thus two operators will be working at Vnukovo airport providing refueling services independently. It is the only such service in the country yet. Moscow Air Cluster provides the most active competition. Five passenger handling operators are working in our airport (the airport itself does not provide services for check-in and departure gates – it just rents the desks). We also have two agents at the ramp. We hope to have the third one soon. No problem: if you do not like the quality of baggage handling you may just switch to another company. So in terms of competition our situation is even better than in many European airports.

- The picture is too perfect…
- Unfortunately we also have some problems in the area of competition. I have delivered a report, dedicated to these problems, recently at the meeting of Federal Anti-Monopoly Service (FAS). On one hand FAS is supporting us saying that the business struggle should be taking place, and the services must be provided by several companies. We have provided it. Our agents have submitted documents for registration to Federal Tariff Service (FTS) and the problems have begun – the tariffs are not registered. The service tries to regulate them. And I cannot understand: how can we regulate the competition? These positions contradict each other. You may regulate monopoly. But how can you regulate the competing companies? I think that in this case the service should only monitor the process. They should fight the prevarication, monitor the process and react to any complaints from the customers. But do not try to regulate the market. It runs counter to common sense. Fortunately we have been able to resolve the problem.

- There is a rumor about selling of VARP-400. Is it true?
- I do not know where these rumors are coming from. Not at all. We have acquired this enterprise as an asset necessary for development of the whole airport. And when we have acquired it there were only certificates for repairing Tu-154. It did not even have the certificate for Il-86. And now the VARP is able to repair all the types of aircraft, which perform flights from Vnukovo. And it is not only C-check, but also repair of components. We are repairing wheels and brakes for almost all the Vnukovo-based airlines and some other carriers. We are carrying out the diagnostic operations of all the units and components. A great amount of finance has been invested in certification for repairing Boeing and Airbus aircraft. Then we have expanded work in the area of repair of components. We have a highly qualified staff and we invest in training of our employees. 300 persons with higher engineering education. They all speak English and have good salaries. The only thing we have abandoned is maintenance of engines. Russian engines, for which we have certificates, are not manufactured anymore. NPO Saturn and Perm Engine Company are repairing these engines. It was a hard and capital-intensive production and the work of the workshop was not justified. Anyway, if we look at the plant’s equipment, even the foreign operators are not trying to bring something. It suits them down the ground. So the VARP is absolutely necessary.

- What about the status of the process of joining Vnukovo and Sheremetyevo airports?
- We have got the process of joining ahead of us. It will be an estimate first of all. The assessment of Sheremetyevo has already been performed. It has been used during the joining of Sheremetyevo International Airport (SIA) and Terminal D. The Moscow Government Decree on transferring of block of Vnukovo’s shares from Moscow Government to the Government of RF has already been signed. The block should be entered in the books of Federal Property Management Agency soon and then we will assess the enterprise – we will issue the tender and hire a company for these purposes. And then we will meet with our colleagues and consider each other’s blocks and value. Very easy and transparent commercial approaches.

- Is the price situation already clear? Is there any information about how much may Vnukovo cost now?
- There are different methods of the assessment. There are assessments of business, actual cost method, asset group method and debt method. I can say that on the basis of actual cost method: Vnukovo airport has financed the construction of objects with a total value of over 40 billion rubles during the last 5 years. So I think that the total value of the airport may be assessed at about 60 billion rubles.

- The story runs that a Management Company, which will come to Sheremetyevo, will also gain the control of Vnukovo airport. At least it makes sense. What do you think about this process? What part will you play in the process?
- Firstly, the type of the deal has already been defined: merger by fusion. Thus there will be only one legal entity anyway. This legal entity has already been defined – SIA. Vnukovo will join the SIA. Of course it is likely that rebranding will take place after that. Thus the Management Company will manage the both assets – Sheremetyevo and Vnukovo. On the assumption of stock of shares we will surely be a part of the Board of Directors. And of course we will influence the company’s policy through the Board of Directors. But it is too early to say, what management company will come. Anyway we know this business very well. We know the particularity of this business in Russia especially well (every country has its own shading). And if a foreign company comes, it won’t do without local people. That is why we will help them in every possible way. We are interested in increasing the price of shares of the new enterprise.

We can also perform IPO but at least five years later. We should understand that the process of unification will take time. Choosing the management company also takes time. We need to have consolidated international financial accounting. If we will complete the unification process in one year, which is quite possible, we will have four years. But it is absolutely possible to perform IPO in five years, having total passenger traffic of 60-65 million passengers for both airports. With such passenger traffic we will be third or fourth in Europe.