OREANDA-NEWS. December 28, 2010. Vitaly Golovin, general director of Donavia airline sees its primary task in positioning its company as the dominant local air carrier accounting for at least half of the Rostov market and present across the entire Russian South. In this year Donavia has changed its management team: Vitaly Golovin, an ‘Aeroflot man’ was appointed general director, the company got a new commercial director and some other managers. A new strategy was adopted — for three years so far. It involves technological innovations and upgrade in terms of air fleet, manpower, and service quality. Mr. Golovin is positive that there have been certain changes already, over the half year he has been in office.

N: — You have been general director of Donavia for over half a year now, since the April. What has been done and has the new strategy been fleshed out?

V.G.: — We have revised our previous strategy and started aggressive development. The company must always demonstrate that we are a dependable local carrier geared to address the needs of passengers from the Russian South.

Firstly, a decision has been made to concentrate our business in Rostov and other key cities of the South (Krasnodar, Sochi, Mineralnye Vody). Previously, Donavia operated many flights from Moscow, code-shared with Aeroflot; now we are closing down our Moscow division, which was Il-86 based. We cannot diffuse effort if we want to dominate the local market. There has been some flight network development: a new Samara destination added, frequency of flights to Ekaterinburg increased to two flights a week; since November we have been flying to St. Petersburg daily instead of three times a week formerly, and now we have more than 70 out of 100 seats occupied. Ukraine is an important destination for us, and the latest improvements in the Russian-Ukrainian relationship create new bright prospects: starting January we will be flying to Kyiv, later possibly Simferopol and Odessa. Donavia will be actively expanding the German direction. We have abandoned Frankfurt flights and taken up Munich — left a competitive environment for a non-competitive one. Lufthansa has a hub in Frankfurt and its own connection flights, which is important because the majority of the passengers are transit passengers. You cannot outplay Lufthansa here. But the main points of attraction for Russian speakers in Germany are Munich, Hannover and Dusseldorf. We are now holding talks about convenient interlining from Munich across Germany with the low-budget carrier Air Berlin. Apart from that, I believe that the direct flight to Israel will resume and we can make it a daily flight — that is sought for.

A second step was to decommission the good but inefficient Tu-154 aircraft. Even if we take into account the Boeing lease fees, the numbers are not in favour of the Tupolev Tu. Ideal would be to sell them – but if we can’t, we will scrap them or give away to a museum. This summer have we operated Tupolev Tu-154s on the Mineralnye Vody – Moscow line, and we can at best leave them in as a reserve. I am reducing the personnel count at the moment, first of all those who did not manage to retrain to operate new aircraft. We are not going to fire anyone, everything is happening in the natural way. We are pensioning off our aged personnel, with honours and welfare payments. We have retrained all our flying staff — those who could and wanted to — for operating new machines. One big problem is English Language Level 4. Boeing pilots must speak English even on the intercom, so much the more with flight operations officers; no documentation may be translated into Russian.

Staff reduction is a difficult step, but it will take the company to a new level. We will do with fewer people. I think we will leave in about 1,000 out of the present 1,300. This is in line with the world’s best practices, so that the company operates effectively.

Next, we must make a breakthrough in terms of technology: improve our Web sales, introduce payment and check-in kiosks, and so on. We intend to ‘rock’ all the time, invent attractive offers to promote passenger loyalty. One of the innovations that our customers have already noticed is the better in-flight meals. Next Monday, we will have finished testing and commercially launch the one-time baggage check-in service on international transit flights, which means passengers can clear customs control without needing to repeatedly check in their baggage, and claim it one time at a final destination point. We have changed our timetable, the frequency of flights. Aeroflot is interested in having all their subsidiaries work within a single standard, and Donavia certainly needed pulling up in terms of technology and service quality. That is perhaps the main reason why I was appointed here: I have experience of deploying hi-tech systems in the business.

N: — Service used to be Donavia’s weak point (at least in the Aeroflot Don days). Our readers have many times described their negative experience on the pages of Gorod N: flights being delayed or consolidated, the company acting in a way that is far from ‘customer oriented’.

V.G.: — I have seen those materials, and the most of those problems are yesterday’s story. Consolidating two flights (When an earlier flight is cancelled and its passengers are put in the vacant seats of a later one. — N) is not prohibited by the law: the contract for carriage obliges us to carry a passenger from A to B, but does not say exactly at what time and on what aircraft. Ethically speaking, it is not good. Practically every airline uses that technique, but tries to not overuse it. Each situation is unique. Sometimes flights are consolidated, when the earlier one was delayed for weather or other force majeure reasons, meaning this is done in the interests of passengers. Say a plane breaks down in an airport which is not its base, and we do not know how much time the repair will take, but we have another flight in two hours — and we send the passengers. Now, from their point of view it seems that we have deliberately waited to combine the flights because of underload and in order to save money. Consolidation due to underload is theoretically possible, but as far as I know such a thing has never happened while I’ve been the head of Donavia.

N: — Could a delay happen because the operator is waiting for somebody, in order to fit somebody’s schedule?

V.G.: — Usually, regular flight cannot wait for anyone. When the Governor flies he never takes the liberty of being late, and if he is in Moscow and calls us to say he will be late for the return flight, we have all the rights to transfer him to another airport — for example to Vnukovo instead of Sheremetyevo, or the other way round, where our flight is leaving in half an hour. In case of charter flights booked by a tour operator the company will simply provide an airplane. If this is a foreign airport and the tour operator says, 'Please wait for a group of 20 tourists, we are taking all the responsibility for passengers' complaints, we’ll talk the delay over with them and give everyone a bottle of champagne', then we’ll agree to it knowing that the next flight to Rostov from there is in a week.

N: — In March the N's reader Yury Kolesnikov described a situation on a plane flying Moscow – Rostov where at the instance of some military officials under influence the plane was landed in Rostov, though the weather did not permit, and during landing the plane drove out of the runway, causing an extremely dangerous situation. Can you comment on it?

V.G.: — There has been an investigation into that case, the situation was caused by something involving ground services. In any case, it was through no fault of the airline. As for the mentioned generals, it happens that somebody has one over the eight and starts brawling, ‘I am an ex-pilot myself, I have just called Rostov and the weather’s fine,' but that cannot influence the actions of the pilot. It is impossible! According to the flight security requirements access to the cockpit must be blocked, there is an armoured door with a code lock, and even when a pilot goes to the toilet the door is blocked by a flight assistant.

N: — But in the heart of all those complaints is rather the lack of proper service, of a normal attitude: the company didn’t feed when the flight was delayed, didn’t provide a hotel, kept passengers guessing, didn’t apologize for the inconvenience … Those seem to be easily fixable.

V.G.: — Yes, you are right, it is easy to improve the service, all you need is to want to. The question is different: in each situation we must look into the details. Sometimes passengers are not informed on the departure time because the company do not know it themselves. Let me give you one example: a plane has all lights up on the instruments panel. It might be just corroded sensors. But we do not know how much time the repair would take — maybe five minutes, or maybe two hours. We give an estimated delay time. Another example: early December we had weather conditions when it rained at sub-zero temperatures, remember? Airplanes got simply iced up with the ice 2 cm thick. While we were busy douching one side with hot water, the other side would ice up again, and we did not have enough hot water tanks, had to wait for new ones to arrive — the Rostov airport is not giant; its technical capacities are limited. All that time our passengers sat inside the cabin watching all that going on. We would be happy to tell them the estimated take-off time, but in situations like that we are unable to estimate it.

As for the airlines being obliged to feed and accommodate passengers when a delay is caused by weather and through no fault of the airline itself, that clause was added to the Federal Aviation Rules only two years ago. The matter is still being discussed between carriers and authorities, because the measure is a clearly populist one. Believe me, the market has changed a lot, we are now in a highly competitive environment where any carrier's ultimate goal is to keep passengers satisfied. It is just that sometimes passengers see things not as they actually are. All our activities are aimed at ensuring that there are no complaints. By the way, Donavia is the most punctual carrier of all flying from Rostov; we always have a reserve aircraft in Rostov.

N: — Can you comment on the Federal Antitrust Service claims to Donavia concerning setting different tariffs for the same services package?

V.G.: — Yes, I was at the hearing and said that such kind of infringement can be dealt with only by professionals. We allegedly sell the same thing at different prices; but we have the Air Code to follow, and we follow it. The FAS has not a single complaint from the passengers, we have not violated anyone’s rights. We have filed an appeal against the court’s decision in favour of the FAS.

N: — Recently, you have added two more flights to the six on the Rostov – Moscow line. This is a very competitive direction. How are you building up in the niche?

V.G.: — What is going on now on the Rostov – Moscow route is sheer madness, in my opinion. Companies are offering more flights that the market needs (19 flights daily. — N). This is a line with a consistently high traffic, irrespective of season, and on the whole it has always been profitable. We are holding a certain part of this market, it is strategic for us. But we cannot stop new carriers from operating on this route! Now, UTair has added a second flight, Transaero has entered the niche. We used to have 4 flights at Sheremetyevo and 2 at Vnukovo. I considered Vnukovo important, but two daily flights was inefficient as we are not business-oriented, and business travelers need alternatives — they want not only morning and evening flights, but daytime flights as well. The Moscow passenger traffic is distributed between airports as certain points from where it is easiest to get to a given place in the capital. Meaning if I need to the south of Moscow, I won’t fly to Sheremetyevo. At the moment all the companies operating on the Rostov - Moscow route have a modest load of about 60%. Avianova might have a higher load owing to the prices. I do not regard the Avianova project as a business: nobody is counting how much this all costs, tickets simply cannot cost that little. One can only sell at a loss if there are prospects, and in this case there are none.

N: — What share of the market are you aiming at in Russia’s Southern Federal District?

В.Г.: — We account for over 50% of the Rostov market, we would like to keep this figure to dominate on the Russian South. Today we are able to retain this market share because our aircraft are based here, and there are routes we alone operate. As for the development in the region, we put great hopes on Sochi; we are de facto a base airline there. However, since this is a very seasonal market, an average annual share of 15% is considered a lot. We are holding talks with Kavminvodyavia airlines; there needs to be pilot retraining there, at the moment they are flying Tupolev Tu-154s.

Interview by Yulia Urakcheeva


Interviewee Details

Vitaly Golovin was born in Voroshilovgrad in 1959. He worked for Aeroflot since 1992. He coordinated several major projects, including the launch of KD Avia airline in Kaliningrad (the project was rolled up in the crisis days because it did not pay). Mr. Golovin was appointed general director of Donavia in April 2010. He is married, has two children.

Company Details

Donavia was established in 1993, before 2009 the company was called Aeroflot-Don, before 2000, Don Airlines. The airline is a Joint Stock Company, with 100% of the stock owned by Aeroflot Russian Airlines. In the 9 months of 2010, the company carried 1153.6 thousand passengers (21.6% up from the same period 2009). The company’s revenues over the 9 months of 2010 amounted to 5.8M RUB, net income 184.7M RUB. Average passenger load factor is 81.5%. Before 2010, Mikhail Kritsky was the company's head. After the appointment of Vitaly Golovin, Mr. Kritsky was appointed Aeroflot’s representative in Bulgaria.