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. Last Updated: 07/27/2016

Transaero: New King Of the Skies

Few Russian businessmen can boast of beating the legendary Richard Branson of Virgin Atlantic Airways on the playing field of commerce, but Alexander Pleshakov and Grigory Gurtovoi of Transaero Airlines have done just that.


The two men, who founded Transaero four years ago, topped Branson earlier this year to win one of the most prestigious awards in commercial aviation, a prize given by the U.S. magazine Aviation Week and Space Technology to the year's most successful airline operator.


In a year that must count as a nadir for Russian aviation, when a passenger flying over the Commonwealth of Independent States was declared 10 times more likely to die in an air crash than in the rest of the world and some governments ha ve advised their employees not to use Russian carriers, Transaero's feat looks all the more Herculean The airline began as a small consulting company in 1990 with just 500,000 rubles in starting capital. Its first step into the big leagues came in 1993 when Transaero became the first Russian airline formed independently of the old state carrier, Aeroflot, to make scheduled flights.


Since then the upstart airline has come a long way.


The company turned a profit of 2 billion rubles ($94 million at current exchange rates) in 1993, said Gurtovoi, 31, Transaero's first vice president. In the first six months of 1994, the number of people flying Transaero has increased by more than 2.5 times, he said.


The roughly 500 so-called "babyflots" and private carriers that have emerged since the collapse of the former Soviet Union have by contrast had a difficult time, losing money even as Transaero was coining profits this year, according to Vitaly Solomatin, chief of economic planning for the Transport Ministry's Air Transport Department.


There appear to be several secrets to Transaero's success. One, according to company officials and outside experts, is that the airline was the first to offer passengers an international standard of service otherwise unknown on domestic flights in the former Soviet Union.


"They were the first company to offer the same service on domestic flights that Aeroflot only had on international ones," Rybak said. "It led the way to the creation of Western-style airlines in this country."


Gurtovoi said he hired people who had never worked for the old Soviet airlines as flight attendants and had them trained by Air France, British Airways and the U.S.-based United Airways. Now, he added, Transaero staff help train workers for other airlines. Many passengers are prepared to pay a bit extra for the Transaero treatment. An economy-class ticket to the Black Sea resort of Sochi costs a Russian 167,200 rubles compared with between 102,000 and 125,000 rubles ($50 to $60) on one of Aeroflot's successor airlines.


For foreigners, however, there is virtually no price difference between Transaero and a state-owned carrier: the former charges $130 for an economy class ticket to Sochi and the latter a mere $2 less.


Transaero's 50 shareholders include Aeroflot international and the Moscow city government -- but the company is one of only two truly privately controlled airlines in the country running scheduled flights and this too has contributed to its success.


"Basically, we started from scratch," Gurtovoi said, speaking at his office in central Moscow. "All we had was one room and a project."


Gurtovoi, recalled that he and some colleagues in 1990 came up with the idea of a new state-owned airline for the Russian Republic, which at the time was struggling for independence from the Soviet leadership. According to Gurtovoi, the Russian government approved the project, but its attention at the time was fixed on political battles rather than creating a national carrier.


"It was a messy time," Gurtovoi said. "So we decided to put our project into life ourselves."


According to Gurtovoi, the company started making money in 1992 by running charter flights. Transaero was soon able to lease another IL-86 and a number of other Soviet-made planes.


The airline now leases six Boeing aircraft -- four 737s and two newer 757s -- as well as an IL-86. The fleet makes regular flights to 10 choice destinations in the former Soviet Union and to Tel-Aviv in Israel. According to Gurtovoi, the company plans to expand its service to Berlin and Frankfurt this year, as well as to three more cities in the CIS.


Gurtovoi said the company prefers Western planes to Russian-made ones because they are more reliable and easier to service.


"Western planes are predictable and Russian planes are unpredictable," he said. "You never know what will break down and where you will get the spare part you need."