Volga-Dnepr Group / Press-center / Media Coverage

Direct Moscow-HK flights viable with long-range Boeings

05/15/2008

AirBridgeCargo Airlines, the scheduled freighter service subsidiary of Russian airline group Volga-Dnepr, is introducing direct Moscow-Shanghai and Moscow-Hong Kong services as part of its 2008 summer schedule.

Other network development plans for this year include turning round some Asia-originating flights at Moscow, rather than going onto Europe, and adding a second Tokyo-Moscow service.

However, a move into North America, which would open up possibilities for the transhipment in Russia and onward movement of Asia-originating cargo to Canada and the US, has been put on hold until the second half of this year and there are no plans to translate previously-indicated interest in the Indian market into action.

AirBridgeCargo has to date operated direct flights between Beijing and Moscow. Other Chinese services out of Shanghai and Hong Kong have been routed via its Siberian hub, Krasnoyarsk and onto Europe.

Now, said AirBridgeCargo's senior vice-president strategy and commercial, Denis Ilyin, two factors had combined to make the introduction of direct Shanghai-Moscow and Hong Kong-Moscow services viable.

The first, he said, was the recent addition of two B747-400ERFs (extended range freighters) to the carrier's previously all B747-200F long-haul fleet, and a third arriving this month. "We could not do Shanghai-Moscow or Hong Kong-Moscow direct with the B747-200Fs but we can with the B747-400Fs," explained Ilyin.

The second factor, he said, was strong Russian consumer market demand for luxury items, which was generating good import traffic growth for the Moscow gateway.

In the case of Japan, said Ilyin, AirBridgeCargo had until late last year operated twice-weekly flights out of Nagoya. However, in September 2007 the carrier had managed to secure a slot at Tokyo Narita, enabling it to also add one service a week from that airport to Russia.

"For a relatively new cargo airline to get a slot at Narita was quite a significant achievement. We are expecting to get a second Narita slot later this year," he added.

Other AirBridgeCargo plans for 2007 originally included starting scheduled services out of Krasnoyarsk to North America following the arrival of the carrier's first B747-400ERF aircraft towards the end of that year. That development, confirmed Ilyin had now been put back. "We will hopefully begin US services in the second half of this year, initially with two flights a week and then, it things go according to plan, increase it to three a week."

Current thinking by the AirBridgeCargo management envisages B747-400ER freighter flights departing its hub in Krasnoyarsk and going via the trans-Polar route to Toronto, Canada. "We consider the Toronto catchment area to be a strong destination market for Asia-originating traffic, which we could tranship in Krasnoyarsk," explained Ilyin.

From Toronto, the aircraft would go on to Houston, US, to pick up traffic including oil/gas industry equipment and then fly back across the Atlantic to Europe (Amsterdam or Frankfurt) before returning to Russia (Moscow and/or Krasnoyarsk).

Ilyin said there were several reasons for the delay in implementing that development. "First, the market was not really right at the beginning of this year. Second, we decided that as the B747-400ERF is a new type of aircraft for us, we would first get used to operating it on existing routes before flying it to new destinations. Third, some of our clients on those existing routes wanted to have access to the new aircraft with their confirmed reliability."

Asked about AirBridgeCargo's plans for India, Ilyin confirmed the carrier had been looking very closely at that market for the last two years. "The problem with India is that the traffic is there but the rates are not good enough. We would not just operate services between India and Russia - we would need to serve India in combination with somewhere else." One possibility in that context would appear to be the Middle East, with Ilyin confirming that was another area of the world where "we really want to be present". Other key target markets for the future, he added, included Eastern Europe.

Volga-Dnepr reported a more than 50 percent increase in the value of group sales during 2007, compared with 2006, to just on US$1.05 billion. Of that total, 71 percent was generated by the group's AN-124-100 and IL-76 freighter charter operations. Group profit for 2007 more than doubled to $49.7 million.

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