- Sergey Gennadievich, last time I had a conversation with the CEO of Rossiya – Russian Airlines was in December 2009. Those were the hard times for the airline. However, almost two years have passed and things have changed in the company. Now, I believe, it is on the ascendant. Tell me about today’s state of affairs in the company.

- Following the results of 7 months of 2011, the passenger turnover has increased by 8,3%, the passenger carriage – by 10%. We hope to transport 3,3 – 3,4 million passengers in 2011. Talking about the type of transportation I would say we have 50/50 ratio between domestic and international routes. But the most active increase is recorded at the international destinations. The launch of Sapsan trains is keeping down the passenger traffic between St. Petersburg and Moscow but the other big cities are demanding intense air service with St. Petersburg. Among these cities are: Chelyabinsk, Samara, Yekaterinburg, Ufa, etc. They are demanding not only daily frequency – the second daily flight is necessary. 

The tourist traffic to St. Petersburg is also growing at high paces. The city has promoted a program of attracting 5 million tourists per year earlier. At present the number of tourists exceeds 7 million. The interest of visiting the city as a cultural center of Russia is growing. A lot of youth and young families with children are visiting the city. We are contacting with companies, which are attracting tourists from different regions of Russia to St. Petersburg. The number of passenger cruise liners’ calls have strongly increased and the market of naval cruises from Moscow to St. Petersburg is growing and it is also generating the traffic for the airlines. The cruise is starting here and ends here. The air transportation is an essential part of it. 

- According to the Aeroflot’s new strategy, the Rossiya airline must carry around 12 million passengers per year by 2025. Thus, you will have to grow four times and achieve the present traffic of Aeroflot in a short period of time. What about the resources for such an ambitious program?

- Yes, at present we are carrying about 3 million passengers having a fleet of 29 vehicles. We must significantly expand our fleet by 2020. But this does not mean that we will need a fleet four times larger to carry 12 million passengers. There is a concept called the efficient use of the fleet. We are working on increasing the fight time of our list fleet and these resources have not been exhausted yet. In addition, the solving of this problem does not always depend on us. In particular, we are awaiting the completion of Pulkovo airport’s reconstruction and after that we will be able to use one terminal instead of two. Today we have a big losses caused by the necessity of using two terminals. The losses are connected with re-aerotowing, re-taxiing, etc. and instead of spending 40-50 minutes on the connecting flights, we have to account for 2-2.5 hours. These are the present losses and we will be able to have different results without them even using our present fleet. Just by the efficient use of the fleet we could have improved our indicators by 15%. Of course we need to expand and renew the fleet too. Even the direct replacement of Вoeing 737 by the similar quantity of Airbus А319/А320 will provide us with additional capacity equal to one more jet.

- And when will the construction of new terminal in Pulkovo airport be finished?

- According to the plan work should be completed in the end of 2013. We hope to start its operation in 2014 and we hope to reduce our expenses and optimize the usage of our fleet.

- How many aircraft and what type of aircraft are you going to acquire in the nearest future?

- At present we are proposing a program of Boeing 737 replacement by Airbus A319 to the Board. The decision should be taken this year. By putting 5 more А319s into operation we will solve the problem of 2013 by owning 20 aircraft of the type. We also have a project of acquiring 6 more AN-148s in 2012-14. Of course all these projects may be implemented only in case of favorable environment. For example, the fuel cost may change our plans and redistribute our resources.

At present we have many types of aircraft in our fleet. We are operating 5 Boeing 737s, 9 - А319s, 6 - А320s, 3 Boeing 767s and 6 Ан-148s. In the network of the new strategy we must operate only two types – the concept assumes development of medium-haul fleet based on Airbus А320 Family and short-medium-haul fleet on the basis of An-148 aircraft. The rest aircraft will be put out of operation according to expiration of contracts on their operation by Rossiya airline. As for Boeing 737s – it is the end of 2012,  Boeing 767s - 2014-2015. They will be replaced by A320 Family aircraft.

Thus, the range of our flights includes all the regions, which may be reached by medium-haul aircraft when performing a non-stop flight. Among such regions are Siberia, Central Asia, and Transcaucasia, European part of Russia, Ukraine, Eastern and Western Europe. And of course, these are also traditional touristic destinations: Turkey, Bulgaria, Greece, etc.

- Capacious wide-body jets such as Boeing 767 have proven themselves on touristic routes. And you are going to abandon them.

- Boeing 767 is the aircraft of its time. Nowadays more efficient Airbus and Boeing aircraft having 200 and more seats have come to replace it. We are not planning to close the touristic destinations and when the operation of Boeing 767 will be over, these flights will be performed by А320/321, and in future, possibly, by MS-21. The region of St. Petersburg is not similar to Moscow and no one uses wide-body capacious aircraft such as Boeing-747 here, even the Western companies, and likely will not use it in future. The passenger traffic demands the increase of flights frequency instead of aircraft capacity. In addition, the long-haul Il-62 have never based in Leningrad historically, the medium-haul aircraft have always been operated here.

- But Moscow not only generates its own passenger traffic, but also at least 80% of passengers on touristic routes are transit ones. Pulkovo’s reconstruction is in progress and there is a plan of creating the North-West Russian air hub.  

- We are located between the largest European AIR HUBS: Helsinki, Copenhagen, Moscow, and we will need enormous resources in order to turn the passenger traffic in the direction of St. Petersburg. It is too early to talk about it. However the direct passenger traffic to and from St. Petersburg will increase. Even now we have already significantly increased the flight frequency on routes connecting the city with almost all large regional centers of Russia. The flight frequency on European destinations is also being increased. We have a good geography in Europe and we are trying to provide a daily frequency on all the European destinations.

An-148 plays a very important role in this process. We have done a great job of providing the possibility of using this aircraft in Europe. Initially we have been limited in it since we needed to pass the corresponding audit. We have passed the IOSA audit and we are awaiting the certificate presentation. We are already performing flights on An-148 to destinations where we have no code-sharing agreements and where the jets without IOSA certificate are accepted. But most of European companies are working with us under conditions of code-sharing, thus they will be able to confirm it only after the acquisition of the certificate. An-148 has been demonstrated to the auditors and has passed all the necessary procedures. The jet was being expected in accordance with SAFA inspections for a long time beginning from the first flights to Europe. We believe that An-148 will help us keep the flight frequency during the periods of autumn-winter navigation.

Of course there are still a lot of questions on learning this aircraft: simulators, pilot training and procedures. Unfortunately, each operator of An-148 is solving these problems independently. We did not even have the period of trial operation for solving all these problems. Instead of this, the airline faces the commercial operation from the very first day and it seems like refinement of the jet is operator’s own problem.

- A lot of lances have been broken on Internet forums, while discussing the commercial prospects of An-148 and its economical indicators. You are the first operator of this aircraft type in Russia. That is why I would like to ask if the jet meets your expectations?

- Why break lances? We are holding regular conferences on putting this aircraft in commercial operation and we have recently presented a report at MAKS-2011 following the results of An-148’s operation during a period of 6 months. At present the commercial jet should have a flight time of at least 300 hours per month. We have been constantly increasing the flight time of average listed aircraft during 2010 and 2011. We have reached the desired indicators in August and one of our jets have performed flights in accordance with a special program of possible increase of monthly flight time to 400 hours. It does not mean that all the resources were allocated to this jet. But it had individual schedule providing the necessary flying intensity. We also believe that the jet, which has 300 hours of flight time per month, must be pay-your-way assuming the fuel prices are within the acceptable range. But the fuel prices are rising.

Note: According to the results of An-148-100V operation during a period of time since 01.08.2011 until 31.08.2011, the jet with a tail number of №61704 had a flight time of 400 hours 45 minutes, showing the high level of systems’ reliability. 153 flights have been performed and 8489 passengers have been transported. The departure regularity was 98%.

 - What factor has been keeping the flight time of An-148 jets down before?

- The first reason is occurrence of some defects, which have been registered during an initial stage of operation and so the refinement was required. The problems have been solved successfully. The second one is the problem of personnel training. Only one training center, absence of full-scale simulator, all of these reasons have led to learning the jet mostly during the airfield training at the initial stage. That means that the jet has been withdrawn from the operation and we used the commercial aircraft for personnel training. At present we have two simulators – in Kiev and Moscow, they are awaiting the approval of Russian authorities. The simulator excludes the delays and problems with personnel training. The increase of flight time only on our fleet will require the expansion of personnel.

The third reason is product warranty liabilities, which have been received first and then we had to reconsider them with the airframer and engine supplier during operation. We have written in the responsibility of manufacturer for aircraft grounding, which was the first such experience in the history of our aircraft industry.

- And they went there?

- Yes, they went there. It is a market step and it is hard to take such decision, but the airframer and engine manufacturer have agreed to go there. And what is significant is that we have gone away from the plant’s payments in three months. It means that they have accepted the rules of this game and started to keep the time of maintenance. By doing this we have significantly decreased the time of aircraft grounding. You must understand that the Soviet standards of continued airworthiness are unacceptable today and no one needs such service. And if the manufacturer agrees with such terms, than we understand that the product is being supported. And if he refuses then there will be no product at all. Moreover, we are continuing to improve these contracts, because we think that only the contracts will let us keep the aircraft’s serviceability and guarantee the manufacturer’s responsibility.

We have addressed the government asking to provide assistance on the initial stage of operation but received an answer saying that we must solve our market problems with our suppliers by ourselves. We have the recommendation. And now answering the colleagues’ question: «How many of your jets are flying?», I am saying: «All of them»!

- And how did D-436-148 engine declared itself? Have you ever taken the engine off and departed it to the manufacturer’s site due to technical problems?

- There were no forced takeoffs. Moreover, the engine has a modular design, thus its maintenance and the replacement of its components may be carried out in our hangar without having to depart it to the manufacturer. It is the state-of-the-art engine well-adapted for the modern conditions of operation and maintenance. I assure you that we had much more problems with engine while mastering the Tu-154 aircraft.

- Are you satisfied with the jet’s overall fuel efficiency?

- Not exactly. We have elaborated some proposals on increasing the jet’s fuel efficiency. The proposals have been accepted by Antonov and we are awaiting their implementation. Some of the reserves are right before our eyes. We may decrease the fuel consumption without any serious expenses. We are analyzing the operating modes on lines and the flight altitudes. For example, using the third category landing will help improve our indicators, because diversion always means additional fuel burn and increase of operational costs. The third category has already been potentially implemented on An-148, but the lack of pilots’ simulator training prevents us from using it. It is understandable that we are all dreaming about the one and a half tons consumption, but at present the operational one is higher.

- As I understand it, if you plan ordering 6 more An-148s, then its operation satisfies you. We both know that the airframer has increased the release price of the jet. Are you ready to acquire the aircraft under new conditions? Are there any refinements or upgrades you would like to see in the later level? And, by the way, will you acquire Аn-148-100Е aircraft with an extended range? Maybe you are also interested in An-158 which has a high level of commonality with it?

- If the jets will not be paying off, we will not acquire them. This is our principle position. By now we are the only operator in Russia understanding the conditions for the jet to pay off. Moreover we have some specifications on improving the jet. We understand that there is an inflationary factor, but all the parties should understand that no one will operate the unprofitable aircraft.  

We are already negotiating with manufacturers and leasing companies. At present we are harmonizing the specifications and characteristics. It is quite possible that we will issue a tender on deliveries of these jets.

Rossiya airline has ordered 68-seated An-148 earlier. There are also variants with 75 seats in the economy class cabin. At present we have developed a configuration with 73 seats keeping the 8 seats of business-class. We are currently awaiting certification of lighter seats with an improved geometry.

We have not considered An-158 yet. We do not need a capacious aircraft with shorter range. The possibility of acquiring An-148’s modification with the extended range is not considered either. An-148-100V enables us flying with the full payload to Novosibirsk in the East, Tel-Aviv in the South and Barcelona in the West. It is quite enough for the efficient operation.