Welcome dear readers of the AVIA.RU, and now the viewers of our portal. Unfortunately, we are forced to sit at home and not to fly anywhere. We fly only in virtual space. Life goes on, we continue to work and learn new formats. And today, Tatyana Arslanova, executive operating director of the Volga-Dnepr group of companies, is a guest of our virtual studio. We will talk about a special segment of our civil aviation — freight transportation.
Anchorman: We all follow the news and see what an unpleasant situation has developed in the field of passenger air transportation today. In some regions, passenger flow fell by 90-95%. This has never happened in the history of civil aviation. At the same time, we are surprised, or even with some joy, to observe how the demand for freight transportation increases. We see how large transport planes deliver medicines, medical equipment and much more to various parts of the globe. A number of airlines that previously engaged in passenger transportation, today also say that they partially redesign their business and also begin to engage in the transportation of goods. In this regard, I want to understand what is happening in this segment. Is demand really growing. Or there are some multidirectional movements, i.e. in some part it is growing, and in some it is decreasing, because it is clear that economic activity is decreasing, and probably the turnover is also decreasing.
Tatyana, please tell us what is happening in your segment? We are very pleased to see the Volga-Dnepr brand on television, when we see reports on how large planes deliver essential goods, medical equipment, and medicines to various parts of the world. How does your company feel today in this difficult time? What special work, new cargoes have to be transported, what new requirements, what new directions that were not previously in demand?
TA: Good afternoon everyone. The feeling today is at the forefront. And, probably, it consists of the following key factors. If we turn to the previous year, the freight transportation market as a whole declined somewhat and there are already reports from IATA and international organisations on how the impact of world trade on the demand for air freight services. But the specifics of last year, and the specifics of probably the last decades, are that half of the air cargo in the world is transported in the luggage carriers of passenger aircraft. And therefore, when we see today how we deliver personal protective equipment, medical goods, this is of course a cardinal change not only in demand in the industry in which we operate, but also a cardinal change in supply.
If last year more than 50% of cargo was transported in the luggage carriers of passenger aircraft, then, taking into account the reduction you are talking about - by 90-95%, it means that key supply chains, including those using luggage carriers of passenger aircraft, are destroyed. And the only solution that remains on the market in terms of fast air delivery is cargo aircraft.
In our group of companies, all airlines have historically specialised in cargo, and we continue this specialisation. Therefore, if in general, then global demand continues to decline. But at the same time, there are serious changes in the structure of this demand, and what we carry. And, as I have already explained, structural changes are taking place in who can deliver goods to our customers today.
If last year industry number one was Hi-tech for us - these are all our gadgets, mobile phones, a load of electronics, in second place were loads of electronic commerce - all that we, clicking on the button, wanted to get tomorrow or the day after tomorrow with different categories on board. That, of course, starting in the second half of February, number one is health care and humanitarian aid products, personal protective equipment, mechanical ventilation, and everything related to our current problems that rise in our life due to the virus and changes in consumption.
If we talk about our indicators, then we have a decrease compared to previous year. This is due to global trade, the global economy, and the crisis over the virus that spreads across all industries. We understand that today airline offers are limited. We welcome the decisions that passenger airlines make in the current situation, to join our opportunities and carry goods not only in the luggage of passenger aircraft, but sometimes we see how goods are transported in the aisles [passenger cabin]. Today, fast logistics is the only way to provide people who are in self-isolation and quarantine with everything they need.
- I think that not all of our viewers are professionally trained, so a little help on the group of companies: The Volga-Dnepr group of companies includes three airlines. This is, directly, the Volga-Dnepr airline, which operates huge An-124 Ruslan aircraft and Il-76 aircraft, the Air Bridge Cargo airline, which flies the Boeing 747, and the Atran airline, which operates the aircraft smaller, the Boeing 737 family. Right, I didn’t miss anything?
TA: Yes, that's right.
- The next question is precisely connected with this. Of course, we all remember the times when the Volga-Dnepr airline was born and it immediately began with the large giant aircraft An-124 Ruslan. A unique offer appeared on the market for the transportation of large - oversized unique goods, and such transportation was in demand around the world. After that there was a certain period when Air Bridge Cargo became more popular. Meaning some groupage cargo and transportation on regular routes, on Euro pallets. The demand for transportation by Ruslan aircraft was slightly reduced. Now, in the new realities, has this trend changed, has demand changed? I mean, from the point of view of the types of cargo transported and the demand for aircraft?
TA: As you correctly noted, the group’s activities were initially aimed at three different segments. And they differ among themselves both in the structure of customers and in the transportation missions that we carry out. Charters on the An-124 and IL-76, in addition to large-sized and super-heavy cargo projects, based on the specifics of the development of the aircraft, were intended for humanitarian missions. These humanitarian missions ... For example, we always remember Ebola, and how we developed special solutions for disinfecting aircraft and protecting pilots. Transported, in fact, mobile hospitals and all that is necessary in order to save people.
At the moment the cargo structure for the An-124 and Il-76 charters has definitely changed. If last year the oil and gas industry with turbines and aerospace with large engines took first place, now these are mobile hospitals, street processing machines that are used in different countries, and this, in particular, personal protective equipment. Given the specifics of the aircraft and the possibility of loading unloading, as we call it, in unfavourable regions, and over the past month and a half, all the regions in the world have become unfavorable in turn from the point of view of the epidemiological situation, then the An-124 and IL-76 specifically for these cargo categories win. That is why the structure of our customers is government orders, large companies that are able to provide these services ...
If we talk about the business of regular transportation to the Boeing 747, then yes, it was focused on large cargo flows, primarily between Asia and Russia, and Asia and Europe - where we have competitive advantages. Of course, it is more adapted to “semi-truckized” cargo, to consumer goods, to what can be transported with standard packaging and using standard airport equipment from the point of view of loading and unloading. At Boeing 747, we partially refused regular flights, taking into account the fact that there is a closure of production, a change in geography [transportation] associated with our operating standards.
And Ruslan is now winning in those regions where it is not always equipped and where it can be loaded from wheels. We see more personal protective equipment already in standard pallets and a change in the delivery regions associated with various airports in China, Japan, Korea, including those related to changes in the airport structure in Russia where we operate flights. We closed some European destinations, focusing on two to three airports in Europe for the delivery of goods.
If we talk about "Atran", then initially specialisation was on express, integrators, and on the quick delivery of small consignments. But today we see that now any aircraft capacity is important in order to quickly solve problems for consumers. And besides the standard transport of integrators between Europe and Russia, there are a lot of requests from Asia and within Russia for quick logistics.
- I want to ask about the priority cargo delivery technology associated with Ruslan aircraft, first of all. We see how these planes are actively flying, including to those regions that they did not fly to before, or, perhaps, were not so active flying. In particular, a flight to the United States, which has already become legendary and will go down in the history of world civil aviation. I understand that this flight was not easy to organise. Because such a full-load route is not an easy solution. How technologically difficult was it to solve this problem, and how was this flight performed? I heard that there were intermediate landings, how cargo was formed, consolidated. What tasks, at what stages did you have to solve in order for this delivery to be carried out?
TA: Regarding the flight to the USA, we must say that the Volga-Dnepr on Ruslans performed and continues to carry out these flights. About the historical flight, it was not the board of the Volga-Dnepr. The second, third flights we flew after the famous carriage, which you mention. But the first famous carriage was not with our board. It is important for us to pay the debt of justice to our colleagues.
But, one way or another, we also continue to fly from Asia to the United States. This requires special procedures, especially under current conditions, to protect, first of all, crews and technical personnel. These are personal protective equipment, this is the inability to exit at certain airports. To date, we in Shanghai and Beijing still do not allow pilots to go out into the city and relax at the hotel. These are intermediate landings in Russia and in Anchorage USA. This is a special handling of cargo upon departure and arrival. And the special processing of the aircraft after unloading, because there is information that the virus is stored, including on things. And for us it is important to completely secure the future transportation that we carry out. We call this sterile charter service. And of course, getting permissions was very important.
- In any case, if you continue to fly, already the second and third flights and work continues, you must pay tribute to you and a low bow from all of us and from all those to whom you deliver the much-needed cargo. Are you taking anything to Russia?
TA: Yes, the number one priority is the Russian market. We saw how the virus developed, and how the requests developed. Initially, we delivered goods from Europe to China, in early February, mainly when China was experiencing big problems. Then the cargo flow changed - from China to Europe and the USA. And last month and a half we give priority to Russian cargo and Russian customers. Today, first of all, these are personal protective equipment, mechanical ventilation. We calculated yesterday - from 16 to 20 million masks we can transport on one plane.
Collaboration with key customers is important here. These are: private medical clinics, structures that order now and protect their staff, and pharmaceutical companies with which we have been working for a long time. But now it’s clear from the categories of cargo that they have changed significantly in favour of personal protective equipment and medical equipment. The key rule that we have now accepted for ourselves is the priority of Russian cargo. And, given that large cargo planes are suitable for transporting any category of cargo - Ruslana for large-sized and mobile hospitals, which are now being built in Russia, and Boeing 747 for personal protective equipment and “semi-lethalized” cargo, we now have several aircraft allocated for priority Russian customers.
- If we are talking about the delivery of goods to Russia, if possible, tell us who the customers are, to which cities the goods are delivered?
TA: The names of customers, given that we did not agree with them, we will not name. I would say that these are large Moscow clinics, these are structures that are currently organising quarantine, self-isolation and support of medical institutions, these are pharmaceutical companies that supply key IVL medications now, and those who supply everything they need at the moment.
If we talk about key areas, despite the fact that we operate flights to both Krasnoyarsk and Kazan, we now use these airports more for transit cargo. All the same, the main cargo flow remains to Moscow. And the specifics of the request are now related to the specifics of the spread of the virus in Russia. But it is also connected with the specifics of the concentration of imports in the previous period, mainly in the Moscow region.
- You have one of the basic hubs located in Sheremetyevo, this is Moscow-Cargo. I also know that you also have a key European hub in Frankfurt. There are bases in other countries. How does the structure of cargo consolidation function now? Which of your base points has the highest load? Has cargo flow through Moscow airport increased now? Or maybe through Frankfurt, or some other?
TA: Speaking of Russian airports, we have significantly increased transit traffic through Krasnoyarsk and Kazan. Last year we discovered Kazan for our Air Bridge Cargo flights. Today in Moscow we fly both in Sheremetyevo and in Domodedovo. And Domodedovo is used, including as a landing point for the An-124 and Il-76, and not just the Boeing 747. Well, also the Boeing 737 continues to fly to Vnukovo. Therefore, in Moscow these are all three airports. And that concentration, which was earlier in terms of hub and import operations, it, of course, [underwent] at the beginning of this year, which was caused, first of all, by operational standards.
It was important for us to arrange transportation in such a way as to avoid crew rest in China. This means that the departure point (or arrival point) should have been closer to China, and Krasnoyarsk from this point of view was an ideal place so that even double crews could save and carry out flights without rest. Therefore, purely geographically, Krasnoyarsk has become such a destination for all Asian regions, and Moscow has remained a point when flying to Europe and the United States.
If we talk about European airports, then we have maintained our presence in Frankfurt. We have reduced flights to Charles de Gaulle Airport. Now they are carried out on a charter basis. And we are now concentrating our flights in Leipzig and Amsterdam based on customer requests, and based, among other things, on the flexible policies of these airports in terms of obtaining permits and the possibility of performing flights in the current period. For example, Amsterdam Airport lifted all restrictions on slots and, if possible, operate flights to cargo airlines.
- So the question not about commerce. I understand that you are now at the forefront. And you fly to those countries, to those cities, to those airports where the peak of the epidemic is now and they are often closed to other carriers. And, of course, you need to follow some sanitary rules. If you can, tell us how the sanitization of goods, the sanitization of the aircraft. As I understand it, this is a big problem. “Ruslan” is a giant - inside it is like a big palace, there is a lot of equipment and it’s probably impossible to spray it all with some chemicals. How does this all happen and who does it? Do you do it yourself, have you gained any competencies, carry specialists with you in a carriage, or do some handling structures at airports, do you agree on this in advance with the receiving party?
TA: In the first place, of course, there is the protection of personnel, our pilots and the flight crew. Therefore, for them, flight standards were changed where it was possible. It is clear that for all personal protective equipment, these are mask-blockers of viruses, glasses, and what we supplied them with. Second, this is a change in procedures, including flight training - for all on iPads, along with a flight plan and standard checklist for preparing for flights, for each aircraft commander. This is to be sure that the personnel and crew comply with these standards, the rules that are provided for wearing masks and personal protective equipment.
The following key rule, which was easy to implement on the Boeing 747, but more difficult on the An-124 - all airport services are forbidden to go up to the upper deck, where the cockpit is located. The only thing is that one representative descends and receives the necessary documents with gloves on, or if there is a need, only one representative of the airline in special protective equipment has the right to go up to the upper deck, where the pilots work. Also special procedures for relaxing at the airports. We had to order a separate transport with trusted drivers and transport companies.
At some airports, we asked for dedicated corridors so as not to go through the customs border with our returning passengers for our pilots. Accordingly, when entering the city there is also a special transport. And some airport hotels have chosen to provide us with a separate wing or a separate floor for our pilots to stay in their rooms so that there are no exits to the city and no contacts with others, including arriving passengers and crews. This is what concerns the protection of personnel and the flight crew.
We have been discussing the topic of testing for a long time. At some airports, testing is organised by airport services. It is for all arriving personnel. The key restrictions for us are, of course, quarantine measures. For anyone arriving from abroad, this is 14 days of quarantine. And there were many stressful situations when quarantines were introduced everywhere around the world. And very often the fact that logistics companies, airlines and the need not to quarantine pilots, that the airline complies with all requirements, had to prove and receive exemptions. To prove that our pilots live in separate hotels, do not go out into the city and observe the necessary measures. And the fact that it is now important not to stop the supply of vital equipment and goods.
If we talk about aircraft handling. A cargo plane, on the one hand, is easier to handle than a passenger one - there are no seats there. And yes, this is a large "palace", but it is the walls of the ceiling and the cargo compartment. There are places where they are specially treated, they pass with napkins, and are not doused with special liquid. As a rule, airport services do this and we specifically order it at each airport and require processing. For us, of course, it is important that all procedures are followed, and there are representatives of the airline who control how the aircraft processing supplier works. Well, it controls that places that cannot be processed are processed according to special standards.
And another important part for us in terms of aircraft handling is the control of the supplier. And the fact that our supplier, airport services, follows the same strict rules for their own protection. Because people do it, and at the first stage at some airports, we saw that the airport services staff did not comply with these personal protection rules that we implemented for our airline. And this is the negotiation process and the answer to the question, but how to implement these strict rules.
- Tatyana, at the end of our conversation, could you give something life-affirming. How do you see when this is all over, what are the prospects for our and global civil aviation? What do we expect in the future?
TA: This is a great chance for us to learn lessons. From what we can do and how, including, perhaps, to change our requirements for passenger and cargo aviation. We see, firstly, that today there are not enough cargo planes to fulfil all the needs. We see that passenger aircraft, in order to start transporting cargo, also take time to decide how to quickly do this. We understand that this is a difficult situation: negotiating with staff on downtime, the inability to remove all passengers ...
The ability to quickly convert a passenger plane into a cargo plane and vice versa and quickly rebuild the company’s work is probably another important lesson. Perhaps in the future such planes will come up - transformers that will fly. And the third part is the sanitization of aircraft. We worked out the option, in addition to processing - simple ultraviolet lamps - recirculators that could be built into the aircraft system. It seems to me that here such a boom in the aviation industry, engineering and creative thought will be triggered by this crisis.
I believe that airlines will fly soon, and will be these flagships that will transform the aviation industry as a whole and our ability to return to mobility and life outside of quarantine.
- Thank you for the conversation, for life-affirming prospects, your vision and optimism. I want to wish you, pilots and employees of all your companies health and interesting work. Mutually beneficial work for you and for your customers, for all those whom you provide with the necessary goods. And to all who watched us, I want to wish you good health.
Today in our virtual studio AVIA.RU there were: the executive operating director of the Volga-Dnepr group of companies Tatyana Arslanova and I, Roman Gusarov, the editor-in-chief of the AVIA*RU Network portal. Thank you for being with us.
