Home / Archive / N3 2009 / ART TO DEVELOP IN CRISIS
ART TO DEVELOP IN CRISIS
Kaliningrad expands horizons
In the first quarter of the year Russia's air traffic dropped by more than 20% compared to the same period a year earlier. According to Rosaviation data of March, Russian air carriers faced 22,3% decline in passenger traffic this March compared to the same month a year before. Whereas cargo traffic fell by 22%.
However, even among a heap of these negative factors flourishing in the market one can find something positive. The existing downturn has made the government pay more attention to the inner problems of the industry not only in the central areas but also in the regions. A map of Russia will tell why more attention is drawn to a hub in Kaliningrad and to one of the major air Russian carries “KD avia” in these latter days and especially after the crisis that hit the industry in the beginning of the year. The region has a huge geographic and logistic potential. Within a reasonable time Khrabrovo airport may become the main Russian door to Europe and at the same time a global hub on the way of transit European and Asian cargo streams. Today “KD avia”, which rests the leading operator in Kaliningrad region and the management company of the global aviation project, is in fact building up a new cargoand-passenger transit airport that meets all the modern requirements of comfort, safety, quality, cost effectiveness, customer service and cargo processing speed. The project of the border crossing point between Russia and Europe working on the basis of “hub&spoke” principle was launched on the 15th of June 2007. The hub was aimed at offering passengers from Russian regions the ultimate air bridge between business and cultural centres of Russia and Europe. Within a very short period enormous work has been done to establish necessary conditions. The flight schedule has been arranged so as to reduce to a minimum total time transit passengers spend en route, which makes no more than two hours and a half. It is for the first time that one-time check-in has been introduced at all the routes simultaneously as well as passing though customs formalities concerning luggage on the way from Russia to Europe and vice versa without the
passenger’s involvement.
Significant investments have been made into technologic and technical equipment of the company. For instance, “KD avia” has acquired one of the fullest software packages named Sabre. As a result the company has become another enterprise (after the biggest national air carrier) working on the base of Sabre and the first company by a number of software products acquired.
In August 2008 explosion detection system CTX5500™ DS certified by TSA was installed in the international airport of Kaliningrad (Khrabrovo). Besides, for about one year and a half “KD avia” has successfully been using «AIR CARGO» (made by Information Logistic Centre “Aerograd”) – air traffic resources management system that allows to effect automotive cargo traffic sale and on-line cargo booking as well as to manage a modern freight storage. Due to cooperation set with border and custom services, connecting time for bonded cargo is around 2 hours. For less than a year, one of the most efficient Russian sales network has been launched. Virtual 24-hours air ticket office project was implemented not only as rapidly growing e-commerce but also as a 24-hours call centre offering passengers apart form information services an opportunity to buy tickets with the help of operator. At the same time payment acceptance services has been introduced though the partner banks, terminal network and etc. The operating system of interlines, which includes more than 60 air carriers, allowed “KD avia” to effect sales in almost any place of the world.
“Hub project in Khrabrovo is the only such project that is successfully implemented in Russia,” states Regional Government Structure Minister Alexander Rolbinov. “Unfortunately, it was not possible to reach the full capacity and the growth clashed with increase in fuel prices and then with the world financial crisis. But at the same time “KD avia” shows the highest increase rates in Russia. It has been recognized on the federal level that the project needs to
be supported”.
4 billion support It was not long ago when Russia’s Presidential Envoy to North-Western federal region Ilya Klebanov called on the state government to speed up 4 billion rubles allocations from the state budget to Kaliningrad
air carrier “KD avia”.
“It is necessary to accelerate the decisions the government has taken in relation to “KD avia. The decision to allocate 4 billion rubles from the federal budget to Kaliningrad region and contribute to the charter capital was taken during a meeting headed by Russia’s Prime Minister Vladimir
Putin in April, he added.
Kaliningrad region administration expects to receive control stake of the company in exchange for these investments. “There is a government journal approved by Vladimir Putin. Everything is written there. The amount mentioned in the document has not come by chance but it has been calculated so as to stabilize the situation in “KD avia” and to divide the company’s activity into air traffic and airport fields. All the documents were sent to the government. Being an official myself, I would not criticize the work done. But the officials should work more intensely’, said
Ilya Klebanov.
Thousands of plans to implement The company does not rest on oars and by its own means tries to develop Khrabrovo airport as a passenger-and-cargo hub of European and Asian importance and expanding its flight geography and partnership with other air carriers. Thus, starting form this June Krasnodar has joined the carrier’s route network. Today “KD avia” and “Kuban airlines” offer Krasnodar region residents convenient flights from Krasnodar to Europe and vice versa though the international airport Khrabrovo in Kaliningrad. Thus, Krasnodar becomes involved into a hub project, which should function on the basis of “hub&spoke” at the intersection of airways between Russia
and Europe.
Apparently, the enlarged flight geography implies a broad aircraft fleet. Despite the global downturn, the company aspires to fulfill the tasks set and increase the existing fleet. Last year “KD avia” placed an order for 25 Airbus А319 aircraft, which the company plans to exploit at the developed domestic and international route network out of Kaliningrad. The first deliveries are supposed to take place in the first quarter of 2014. And by 2016 “KD avia” expects to increase its fleet to 60 aircraft, including 50 jets of А320 family. Besides, 6 long-range airliners and 4 regional jets АТR-42/72 type are to join the carrier’s fleet. By the end of 2009 the air company plans to add 4-6 aircraft of A320 family on the terms of operational leasing.
If the company’s plans come to life, in a few years the phrase “window to Europe opened by Peter the Great” will imply another meaning and a new modern and safe hub will appear in Russia. And maybe it’ll be so. Judging by past experience, crisis does not thwart progress, it makes some adjustments and in some measure accelerates the process.
Once upon a time unitary enterprise “Kaliningradavia” was among hundreds of companies formed after the collapse of the only all-union air carrier. However, “Kaliningradavia” as a unitary enterprise did not last for long – inefficient management and huge debts made the company bankrupt and halted its activity. But it would be politically wrong to leave the distant Russian areas without any lines of communications. In 2002 private investors founded “Kalinigradavia” JSC, which replaced its name to shorter “KD avia” in 2005. Few people believed in the new company’s success. There was neither branching route network nor slots confirmed by Russian and moreover international airports. Besides, the company had to operate such aircraft as Tu-134 and Tu-154, “inherited’ by “Aeroflot”. But against all odds year by year “KD avia” showed growing development
and increase in passenger air traffic.
Today, the company’s route network covers such cities as Astana, Chelyabinsk, Omsk, Kazan, Ufa, Samara, Perm, Volgograd, Rostov-on-Don, Nizhniy Novgorod, Saint Petersburg, Moscow, London, Paris, Berlin, Tyumen, Dusseldorf, Munich, Hamburg, Vienna, Sophia, Rome, Milan, Barcelona, Prague, Tel Aviv. All flights are multifriquent, which means from 3 to 18 flights
a week.
January results revealed that “KD avia” faced a rise in air traffic by 25% and became the sixth air carrier in Russia. In 2008 "KD avia" has transported total 1 361 570 passengers, 106% more than in 2007 when 662 241 passengers chose the company’s services. In 2006, “KD avia” the number of passengers transported by the company was equal to 583 720. The high growth indicates a strong demand in the carrier’s services among
passengers.
In terms of development “KD avia” is carrying out the second phase of the hub project, which is due to be put into service in 2009. It will help to start flights to new directions as well as to increase flight frequency on the existing routes.
