Group Strategy

Mission: We build dependable air bridges for our Partners across the world. We use our work and unique opportunities to change ideas about the air logistics. We are convinced that we will achieve our goals by way of promoting success of each employee, which leads to success of the company.

The Global Target of the Group of Companies: The Volga-Dnepr Group of Companies is an “eternal” professional organization with dynamic growth rates, which is part of the twenty top air cargo transportation industry companies. Volga-Dnepr's shares will be traded at a premium as compared with its competitors.

The corporate goal is to become the single international organization, a “cargo supermarket” offering services in the area of integrated cargo logistics by 2019.

The Volga-Dnepr Company must become the leader and recognized expert in the charter air transportation of unique and oversize cargo using all types of ramp aircraft.

The Volga-Dnepr Company must become the leading Russia-based customer-oriented company, provide air logistics services, and generate constant positive return on capital for its shareholders.

Core Services and Markets

Currently, the airport-to-airport delivery of cargo is the core Volga-Dnepr Group of Companies business. The Group of Companies is represented on two key segments of the world air transportation market:

Transportation of extra-heavy and oversize cargo using the Soviet-made ramp An-124-100 Ruslan aircraft on a charter (one-time) basis across the world. Volga-Dnepr leads on this market segment, and controls over 50% of this market segment.
Scheduled transportation of general cargo using B-747 aircraft between Europe and China. The project was launched in 2004. The growth in regular cargo transportation is based on using opportunities offered by the Russian market as a unique transit territory between Europe, Asia and America, on the one hand, and developing the potential of the imported cargo network delivery potential in Russia, on the other hand.

The product portfolio is planned to be expanded in the area of intellectual products, and the integrated logistics will be developed by 2019. The share of such products should make more than 20% of total sales.

Competitive Edge and Key Success Factors

Following are the key success factors required in order to achieve the 2019 Volga-Dnepr Global Target. In the area of finance, its investment attractiveness and profitability of strategic projects, which, on the one hand, are achieved through the following market factors:

Leadership as the ability to shape the market and vision 1 to 2 steps ahead.
Uniqueness as a system of unique competitive advantages.

And on the other hand, are based on the publicity and transparency of the Company.

Certainly, all these factors must be backed by the management team. Quality, managerial generation continuity system, loyalty and satisfaction of the personnel, as well as sharing of the company values by its employees.

As of today, the competitive advantages in the charter business are as follows:

Reliability and High Quality of the Services
Since its early days on the market, Volga-Dnepr constantly works to ensure An-124-100 compliance with the increasingly stringent requirements by the aviation authorities, and to improve the aircraft flight performance. In 2003, Volga-Dnepr fully confirmed compliance of the quality of its services with the ISO 9001:2000 standard. In addition to that, the flight security standards were highly praised by the FAA and ICAO inspection commissions.
Building Long-Term Partner Relations with Customers (Loyalty Program)
The company sales continued to grow, as did the number of the customers. The Company adds up to 5 new customers on a yearly basis, and around 30% of its business is carried out on the basis of long-term agreements with the customers.
The sales and marketing infrastructure is brought within close proximity to the customer. The Volga-Dnepr marketing infrastructure is comprised of 5 sales centers:
- Sales center in Ulyanovsk (Russia) is the oldest marketing unit of the Volga-Dnepr Group of Companies;
- Volga-Dnepr UK Ltd sales center in the United Kingdom;
- Volga-Dnepr - Unique Air Cargo Inc. was established in Houston, Texas in December 2000 to operate on the North and South American markets.
- A sales center was opened at the Volga-Dnepr Gulf location at the end of 2002 in order to bring services closer to the Middle Eastern customers;
- Seeking closer location to the customers, Volga-Dnepr opened a sales and marketing center in Beijing, China at the end of 1994, going by the name of Volga-Dnepr China.
The Volga-Dnepr agent network includes general sales agents in 10 countries: Europe (France and Italy), Asia (India, Japan, Korea, Singapore, Malaysia, the Philippines, and Thailand), Australia and New Zealand.
Unique equipment and loading gear
1. Patented loading/unloading equipment for heavy breakbulk cargo with tieless cargo carrier allows to load oversize cargo (height)
2. Loading/unloading complex for breakbulk weighing up to 120 tonnes.
The scheduled transportation competitive advantages are as follows:
1. Unique possibility to use trans-Siberian flight routes, which cuts the delivery time. Today, Volga-Dnepr is the designated carrier from Europe (Luxembourg and Frankfurt) to Russia, and from China (Beijing, Tientsin, Shanghai).
2. Meeting the demand by European and Chinese customers in transportation to/from Russia using modern and especially suited for this market segment B-747 aircraft.
3. Network cargo delivery to Russia, including the establishment of cargo hubs in Krasnoyarsk and Novosibirsk.

Key Strategic Development Areas

Corporate Strategy

Switching from ‘airport-to-airport’ air cargo transportation to provision of services in the transportation logistics:

monitoring of market possibilities and product portfolio expansion;
increase in the share of intellectual products;
switching to an organization that is transparent, lively and responsive to inside and outside changes;
team-making and knowledge management system.

Achieving synergy between An-124-100 and Boeing-747 businesses by way of:

increased business process efficiency;
overall technical equipment;
possibility to share the aircraft fleet during peak periods;
sales from one-window;

which should lead to a 15% increase in profitability as compared with main competitors.

Charter Flight Market Business Strategy:

beginning of the project for resumption of an upgraded An-124 Ruslan construction, which meets the current and future requirements. This project provides for bringing the number of aircraft from 1 in 2009 to 12 in 2020;
boosting overall efficiency (EBITDA 20%, earnings per 1 aircraft in 2020, $56.2 mln).

Scheduled Flight Market Business Strategy:

maintaining leading positions in expenses;
increasing the aircraft fleet and focusing on one type of aircraft Boeing 747-400. Plans are to bring the fleet up to 10 aircraft in 2020;
increase in the number of routes (Japan, Hong Kong, USA) and organization of network delivery to the Russian Federation and CIS based on the program of the Russian hubs development;
organization of own maintenance in Russia (C-check in 2010; A,B,C,D in 2020).

Strategic goals of Volga-Dnepr Group