Catching a Ride to Sochi the Air Taxi Way

MTDexter director Yevgeny Andrachnikov talking on board the company's jet.
SOCHI, Krasnodar Region — For many in Russia, catching a taxi involves haggling over 50 rubles with the driver of a beat-up Zhiguli — but Yevgeny Andrachnikov's company is aiming much higher than that.

On one such recent trip, Andrachnikov, manager of Dexter taxi services, leaned forward in one of the cab's leather seats to stare out the window, his oversized watch glinting in the sunshine.

The world sped by at 500 kilometers an hour, some 9,000 meters below.

With its small fleet of three bright orange mini-jets, Dexter bills itself as the country's first air taxi service. As the number of millionaires and well-paid executives in the biggest country on the planet soars, the firm is looking to cash in on the boom in private aviation.

Estimates put private aviation passenger growth at about 40 percent last year — up to five times higher than the growth for mainstream flights — but it still seems like many people have difficulty getting to grips with some of the basic concepts.

"The problem is not that people don't need this service but that they don't really understand what it is," Andrachnikov said during a recent 3 1/2 hour flight from Moscow to Sochi laid on for a small group of reporters in one of the company's new Swiss-made Pilatus jets.

"The idea of a taxi in the sky is exactly the same as a taxi on the ground," Andrachnikov said. "You can call up, order one and in three hours you'll have a plane waiting at the nearest airport to take you wherever you want to go."

Once passengers squeeze on board the aircraft, the similarities to a normal cab continue.

The eight-seater, $4.5 million jets are intended for convenience rather than luxury. Cramped and occasionally bumpy, the ride offers cold sandwiches and self-service rather than the champagne, caviar and fawning stewardesses usually associated with luxury private jets.

What differentiates the firm from classic charter jet companies is a cost-cutting business model and the company's own fleet of aircraft inside Russia — that and the fact that one day you should be able to pay for it at a store lobby terminal, just as you'd top up your mobile phone.

Dexter also follows the nighttime rules of the road for Moscow taxis when it comes to fares, rather than the daytime rules: Customers pay by distance, not by the time the journey takes.

"Do you think that the plane is a prostitute that charges by the hour?" Andrachnikov snorted before takeoff.

Each of the company's jets has a fixed rate of 160 rubles ($6.75) per kilometer, regardless of how many people are flying. The 700-kilometer trip from Moscow to St. Petersburg would therefore cost 112,000 rubles ($4,700). For comfort, the optimum maximum distance is about 1,000 kilometers.

"We consider Dexter to be the low-cost solution for private aviation," said Alexis Garbar, managing director and founder of London-based private jet charter firm, Avolus.

Avolus, which makes 30 percent of its annual turnover of 10 million euros in Russia and is opening offices around the former Soviet Union, offers charter jets at 5,000 euros to 9,000 euros ($7,700 to $13,900) an hour.

To charter his company's planes, Garbar estimates that you have to have a disposable income of about $10 million. That means that Dexter is not a competitor, Garbar said.

"There is a market for every pocket, and their company can almost be seen as a good way to democratize the private jet industry," Garbar said.

Andrachnikov says that Dexter's services are not aimed at Lamborghini-driving oligarchs but the Honda-owning managers who "have never experienced the orgasm of flying in a private jet."


Max Delany / MT
One of Dexter's Pilatus planes standing on the tarmac at Bykovo Airport.


Target clients are owners of small or medium-sized businesses spending their own cash or executives traveling on the corporate expenses of large companies with offices around the country, he said.

"Between a lot of cities in Russia there are no direct flights even though there is a big demand for them," said Oleg Panteleyev, chief analyst at Aviaport.ru, an Internet portal that monitors the industry.

For companies with offices spread across the country it ends up being too time-consuming to send managers by standard airlines — meaning that they continually have to fly via Moscow, Panteleyev said.

For people who are flush with cash but short on time, Dexter claims that cutting out the airport waits and associated hassle of domestic commercial travel is appealing. Companies end up saving so many man-hours as to make air taxis the economic option, private-jet firms argue.

"It's not an original Russian idea, but it is better suited to Russia than any country in the world and we are the first national carrier," Andrachnikov said.

Elsewhere in the world, ideas similar to Dexter's have already proven successful.

"We view flexible, point-to-point on-demand air travel as the wave of the future," said Phil Quist, vice president of business systems at SatsAir, an American air-cab firm that has flown over 6 million passengers around the southeastern United States since 2004.

Although it flies smaller jets than Dexter, in 2007 SatsAir posted a 60 percent annual increase in the overall volume of flights and a rise in some states of over 300 percent.

"While high gas prices and overbooked flights have become the norm, many executive travelers are wondering how to conduct business in a timely fashion," Quist said.

As the network of appealing potential destinations — from far eastern oil towns to Black Sea resorts — increases across the country, Dexter's main challenge will be keeping pace with the demand, analysts said.

"The first potential problem is that due to the dynamics of the business they need to have a large number of planes flying as soon as possible to cover all the potential routes," Panteleyev said.

The company could face difficulties getting the jets quickly, Panteleyev said, but Dexter claims that the lack of suitable planes will only prevent potential competitors from coming onto the market.

Dexter's development has so far been slow. The company was dreamed up by defense industry and aviation magnate Sergei Nedoroslev and registered back in 2004.

Co-owned and backed by former Yukos executive and Energy Minister Sergei Generalov, the project is being funded by $25 million of private investment and a $25 million loan from Standard Bank of South Africa.

By the end of the year, they expect to have 13 jets stationed in nine cities across the country, including Siberian outposts such as Irkutsk, Surgut, Novosibirsk and Krasnoyarsk.

In five years, Andrachnikov said they hoped to own about 60 aircraft and eventually grow the company's worth to $500 million.

With only three jets so far and a fourth on its way, it is no accident that the firm has already decided to head to locations like Sochi.

"Business activity connected with all the building in the run-up to the 2014 Olympics means that these sorts of services will be in demand," said Vladimir Reunov, first deputy director of Sochi's much-delayed new international airport, at a news conference in the city.

As proof of the growing volume of business travel, the airport, being built by Oleg Deripaska's Basic Element alongside the existing, aging Adler Airport, will eventually have a separate business terminal, Reunov said.

But until destinations such as Sochi are upgraded, in many locations Dexter's passengers will have to content themselves with basic Soviet-era facilities once they leave the modernity of the firm's foreign jets.

The company's Moscow base is the crumbling Bykovo Airport, 35 kilometers southeast of the city. Apart from Dexter's beige sofa-lined waiting room, the terminal is a derelict shell of broken benches and cracked windows.

Across the airport's cracked parking lot, a rotting Aeroflot jet stands as a monument to the decay of the Soviet empire's aviation dreams.

With his handful of aircraft at Bykovo, Andrachnikov's designs for a private-jet empire, like the country's plans for modernizing its aviation infrastructure, still face a long road ahead.