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. Last Updated: 07/27/2016

Open Skies: Private Aviation Firms Take Off

When the American television networks found out at a moment's notice about the Bush-Yeltsin summit originally planned for Sochi early this month, they wanted to get there fast. Two years ago, a speedy departure was unthinkable. This year, though, the ABC bureau chief, Steve Coppen, picked up a phone, booked a charter flight at 2 A. M. and left the airport seven hours later.


"There was no reasonable alternative but to charter a plane", he said. "I doubt that anywhere else in the world we could have made arrangements on such short notice".


The end of Acroflot's monopoly over the former Soviet Union has permitted a new private aviation industry to emerge.


And demand by foreign business executives who must travel frequently through the former Soviet Union's 11 time zones, has kept engines turning over.


Chartering jets, though viewed in the West as a luxury reserved for Trumps, Tisches and Rockefellers, has become routine - or even mandatory - for much of Moscow's business community over the last year and a half.


Deep-pocketed oil companies that have to get to outback areas constitute much of the demand, but customers range from news organizations to humanitarian aid projects.


Air companies, both domestic and foreign, are cropping up at a rapid pace. Some, like Aerolift, use planes that once transported Soviet leaders like Leonid Brezhnev and Mikhail Gorbachev.


Some use remodeled Aeroflot planes, and others act as middlemen, leasing planes from the current Aeroflot stock that are not in use. AEC Charters, a foreign company, was among the first to enter the market a year and a half ago. They rent out two small planes for $600 per flying hour - up $150 from last year.


"At first we just rented the plane for our own purposes", said Marina Kachusova, manager for the air charter department of AEC'S parent company, Albers Europe Consultancy.


"But when other companies found out, they wanted to use our planes", she said. So AEC entered the fray.


Executives interviewed agreed that prices range wildly. Lack of licensing boards or regulations make it possible for anyone to lease a plane and open up shop.


Some of the older charter companies complain that fly-by-night firms are entering the picture and undercutting the price range established by the companies that first created the new industry.


"There is no law that prohibits price fixing", said Dmitry Vasyutinsky, general manager for Aerolift Charters. "Many military operators have the same aircraft and they are coming in and undercutting us".


Kachusova said that when AEC first started, profit margins hovered around 500 percent. Profits today have dropped to around 20 to 50 percent because of the intense competition, she said.


While profits may be trailing off, prices continue to climb.


White Nights, an oil company, said that they had received quotes ranging from $5, 000-15, 000 per round-trip for a Moscow-Siberia route.


Still, no one seems to mind forking over cash to avoid the hassles which have become Aeroflot's trademark. "It's hideous and horrible", one oil executive said of Aeroflot. "Anyone who has flown it knows that flights are incredibly uncomfortable and violate every international safety requirement in the book. I have flown throughout the Third World and almost without exception it is the worst".


Aeroflot's fuel shortages and lack of spare parts prompt notorious delays that can drag on for days. As time is money. Western businessmen with deadlines to meet have little patience for such problems. Charter companies with access to hard currency can skirt these difficulties.


"With charters, we have control over where we want to go, when", said Anders Morland, Amoco's manager for operations in Russia. "We are not victims". Since the spring, he said, Amoco employees fly exclusively on charters.


When it comes to safety, Aeroflot's problems are more than just a mere inconvenience.


"We have the general feeling Aeroflot is unsafe", said Gary Rinaldi, director of the Moscow office for White Nights, who cited the time on an Aeroflot flight when the captain had permitted him to fly the plane. "But we have not made the decision yet to completely eliminate it".