- Valery Alexandrovich, what do you think about the mechanism of cargo centers development from judicial, economical and operational points of view?

- As you may know, our cargo company (AirBridgeCargo, forming part of Volga-Dnepr Group - editor), which operates Boeing-747, uses Moscow Domodedovo and Shremetyevo airports as the two main hubs. After the flight a cargo is taken down from an aircraft and after necessary custom procedures it is either loaded in an alternative transport of delivered to its destination using baggage compartments of passenger aircraft with the following distribution between regional trade networks using auto transport.

Of course Western carriers and logistics specialists do not work in this manner; their model of delivery is based on aviation component. If we take a look at Western Europe, its large aviation hubs service such global operators as DHL, for example, the large cargo terminal has been constructed in Leipzig for handling different types of cargo including express-mail. Also the format of global cargo company assumes the usage of small-sized aircraft, besides the long-haul jets, such as Boeing 737 for regional routes within a radius of 1000-1500 km. Only in this case the airline has guarantees to provide fast and quality delivery. And when the loaded jets are performing flights all over the country, then the country’s economy works normally.

As for Russia and our business, I would like to admit that every Boeing 747 delivers a lot of cargo to Moscow, but the following delivery of this cargo is being performed in an absolutely illogical way not only from the quality of service, provided to the customer, point of view, but also from the economical one. It is obvious, that a separate airline or a separate fleet must present in our business’ structure for servicing this traffic flow. For example, at present we are delivering 116 tons to Moscow and after that this cargo is being delivered to Perm or Samara during 2 or 3 days. But our new scheme of delivery may decrease this time to one day.

That’s why Volga-Dnepr plans to create the separate airline, which would operate the small-sized aircraft and provide support for our business, based on long-haul transportation.

- How would work in the regional hubs be organized? Will it fully reproduce the Western model?

- Nothing special. The cargo is taken down from the aircraft and undergoes necessary custom procedures. After that the cargo is being reconsolidated on special terminals and storages in accordance with its final destination and loaded in the aircraft of different size. Thus, everything is organized just like in the West.

- As for the creation of separate feed airline, please tell us about financial and organizational aspects?

- The cost of feed airline creation will be about $40-50 million. The project will be financed using company’s own funds. As for new carrier’s opening, we plan to start its work in 2011. We will receive a separate Air Operator Certificate since the company is being organized as a separate legal entity forming part of Volga-Dnepr Group. The name of this company will be selected later.

- Have you already chosen the type of aircraft that will be operated by the regional carrier?

– At present we are considering the converted to cargo version Boeing-737s – it is the best offer at present. The conversion process will be carried out outside Russia. As for the fleet, it will consist of 7–10 jets and we also plan to receive 3 or 4 more, we are working on it.

All the liners will be acquired from European airlines, different acquisition patterns are possible – leasing, direct purchase, conversion, since every jet is individual. If an aircraft has about 20000 hours of flight time, it is expensive and it is reasonable to use the leasing scheme. When an aircraft has 30000 - 40000 flight hours it is economically feasible to purchase it and carry out conversion. And the most important thing is to perform its custom clearing for carrying out domestic flights, it is a separate problem. Obviously, it is easier to perform the custom clearance of cheaper aircraft, since the fees are lower.

– Does conversion assumes the creation of a new modification?

– Not exactly. This process is quite simple. When the passenger airline decides to renew its fleet after 10-12 years of operation it hands these jets over for conversion into cargo version, since the jets are still able to work for a long time. It is a standard world practice when the jets with flight time of 30000-40000 hours are being converted into cargo version.

We also plan to perform the conversion of jets in the framework of Volga-Dnepr Technic structure but later, when the proper manufacturing facilities will be created in Ulyanovsk. At first we will create the possibility for performing different kinds of technical maintenance and the conversion of passenger aircraft into cargo one will be the next stage. It is very serious and it is a large part of business. There are only few such companies in the world at present.

Even taking into account the fact that Airbus is going to perform conversion of A320 in Russia we are not going to compete with them since there are whole families of Boeing and ATR aircraft, besides Airbus, suitable for conversion and having the right weight capacity for us.

– Why have you chosen Boeing 737s, instead of А320s, which will undergo conversion in Russia?

– Boeing 737 suits better for our route network by its economical parameters. In addition, Volga-Dnepr Group already operates Boeing aircraft, and it is easier to service jets from a single airframer, and it is easier to train your personnel for the new type in the framework of single manufacturer. However, the Western standards do not have serious differences in personnel training for maintenance of Boeing or Airbus aircraft.

– What routes will be used by the new airline?

– Of course it will perform domestic flights first of all. But we also plan to perform short-haul international flights for shot lots with weight of 15 – 17 tons.

Our Boeing-747 route network covers the Central Europe well. The most frequent landing point is Moscow and then in descending order: Frankfurt, Amsterdam, Budapest, Saragossa, Milan, Paris, and we also have route points in Belgium and Italy. Frankfurt is the most frequent landing point in our European network; it has a highly-developed airport and hub infrastructure along with relatively cheap system of truck delivery. One kilogram of your cargo is transported within the radius of 20000 km for only 20 euro-cents, it is very cheap! And everything works perfectly – trucks take the cargo from the terminal every 3-4 hours.

In Russia all the flights are going to Moscow and then the cargo is being transported to regional airports. The reason for this is that the main landing points for our long-haul aircraft are Sheremetyevo and Domodedovo, which have the modern cargo terminals and where we see the development prospects. In addition, the capacity is increasing, it is very important for us since every of our 11 Boeing 747s has about 350 - 370 flight hours per month, for example 7 or 8 jets with weight capacity of 110 tons land in Sheremetyevo during one shift.

– What do you think about cargo flow of the new airline?

– At the moment I can only say that these jets will have 200-220 flight hours per months, each jet has a weight capacity of 15-17 tons. Assuming the weight capacity and the duration of flight from Moscow to jet’s destination of about 1,5 hours, you can calculate the prospect cargo flow.