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'I once lived in a country where we only had Aeroflot: I didn't like it'

By The Siberian Times reporter
23 October 2015

Siberian airline tycoon - the Richard Branson of Russia - explains why he is stepping in to rescue stricken Transaero.

'I woke up in the early hours on Sunday morning and told my wife: 'We are going to jump into it.' Picture: RBC

Vladislav Filev, aged 52, has built one Russian airline into a significant player - S7, or Siberia Airlines - but this week he took a gamble that only someone steeped in the air business would ever have dared. By seeking to rescue Russia's second largest airline Transaero, with debts of around 250 billion roubles, some $4 billion, he is flying in distinctly uncharted air space. 

Yet in an intriguing interview with business newspaper Kommersant, he shows his conviction that he is acting to maintain a choice of airlines that Russians never used to enjoy, and which is now under genuine threat. With Transaero - the pioneer non-state airline after the fall of the USSR - staring bankruptcy in the face, he decided to defy the law of gravity. 

'I woke up in the early hours on Sunday morning and told my wife: 'We are going to jump into it',' he said. 

Vladislav Filev

Vladislav Filev, aged 52, has built one Russian airline into a significant player - S7, or Siberia Airlines. Picture: Petr Kassin

The Pleshakov family - Olga and Alexander - built Transaero into a widely respected and pioneering airline in the almost quarter of a century since the end of Communism: but in the end, with the rouble falling dramatically, they spectacularly overreached themselves. 'You can't deny that Pleshakov family created first private airlines in Russia, (and) it was a breakthrough,' he said.

'Their strong lobbying potential made market liberalisation possible, their long haul 747 Boeings brought prices down. They certainly made a lot of mistakes and got the company into a very difficult situation, but this family must not be portrayed in black colour: they really did a lot for the air trade.'

Pleshakov family

The Pleshakov family - Olga and Alexander - built Transaero into a widely respected and pioneering airline in the almost quarter of a century since the end of Communism. Picture: O. Teperikova

He has now reached a deal with the Pleshakov's which may - perhaps - save Transaero at the 59th minute of the 11th hour. His plan is audacious, to put it mildly, and challenges the current trends across Russian business, not merely in the air trade.

'We are in a situation when there is no clear strategy for country's development,' he said. 'There is a trend of businesses consolidation, which we see in oil industry - a similar trend might be applied to aviation. This is why we stand in front and in the way of the state engine, and try to wave at it, signaling that it must not go there. Aeroflot is indeed incredibly important for the country, but it doesn't mean that this is the only company that should be saved. Quite the contrary, some others have to be saved.'

Aeroflot

Aeroflot was the sole airline in the USSR, massively limiting customer choice. It was also an emblem of the Soviet system. Picture: Aeroflot

Filev says he and his team can rescue Transaero if he has total control. Cruical to what happens next is whether Transaero can keep its operator's certificate, its permit to fly. 'The decision on air operator's certificate withdrawal is in the hands of state now, so there is no point discussing its expediency,' he said.

If Transaero is blocked, then Aeroflot - the state airline - 'will become monopolist, taking more than 80% of the regular international flight market and more than 60% of domestic flights.' He sees this as wrong from every angle. 'However the point of no return has not been passed yet.'

He warned: if Transaero collapses it will definitely be a major problem, a bad direction both for the country and for the industry. His solution is to give Transaero's creditor banks some of his airline's shares against the commercial debt - 'and we are ready to keep earning so that shares grow'.

Richard Branson

In Britain Sir Richard Branson's Virgin Atlantic broke an airline monopoly, held by British Airways, ironically a partner of S7 in the OneWorld Alliance, giving travellers a genuine choice. Picture: Alan Barker

Candidly, about his S7 airline, he said: 'Perhaps I was doing it right towards my own company when I tried to sit quiet.' But he explained: 'The problem is that together we are making a country which we won't want to live in. I once lived in a country where we only had Aeroflot: I didn't like it.'

Aeroflot was the sole airline in the USSR, massively limiting customer choice. It was also an emblem of the Soviet system.

In Britain, a very different country, Sir Richard Branson's Virgin Atlantic broke an airline monopoly, held by British Airways, ironically a partner of S7 in the OneWorld Alliance, giving travellers a genuine choice. 

Filev warned: 'With our own hands we are making country worse, and this is exactly the reason why we decided to step in.'

Comments (1)

good luck to him. it is a David fighting Goliath. though we all know how THAT story ended. nevertheless there is no need for that and for sure it will not happen. but competition is good. and i hope he succeeds!
Benedikt, Moscow,Russia
24/10/2015 08:46
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