CEO Interview - A Modern Leader
Transaero Airlines General Director Olga Pleshakova was the first female head of an airline in Russia. But she says the only distinction worthy of mention in business is success
Your strategy offers international connections from a number of Russian cities. Is this a better response to the Russian market than a hub-and-spoke network?
Transaero’s priority is the routes served by widebody long‑haul jetliners, which account for the majority of our fleet. The development strategy is particularly focused in this area but increasing short and medium-haul routes is also important.
Our company is targeting proportional development across all markets—leisure and business, domestic and international—not just one. Transaero is present in all the major regions of Russia. We operate flights from Russian cities to our main base, Moscow Domodedovo Airport, and also connect St Petersburg from a number of destinations.
We also offer international flights from eight Russian regional centers, helping to ensure links across the entire Commonwealth of Independent States (CIS). We plan to further broaden our geography of flights within Russia and abroad from these regions.
Speaking of international flights from Moscow and St Petersburg, I must note that we have come a long way in launching new destinations. We now operate scheduled flights from these two major Russian cities to many financial and economic centers around the world, including New York, London, Beijing, Berlin, Frankfurt, Tokyo, and Tel-Aviv. We are committed to increasing the frequency on these routes in the short term.
In addition to our business routes, Transaero continues to pay careful attention to operations to leisure destinations across East and Southern Europe, North Africa, South-East Asia, and the Caribbean. At present, we are also the only Russian airline operating direct, nonstop flights from Moscow to worldwide holiday destinations such as Miami, Cancún, and Rio de Janeiro.
I would say Transaero adheres to both models: a hub-and spoke network if we talk about operations from our main base and point to-point when flying from other airports. Currently, we deem this approach appropriate.
You have ordered Boeing 747s with a unique configuration. Are you hoping to expand in the leisure/vacation market?
Transaero continues to invest in our fleet expansion and renewal program. Boeing 747-400s in a configuration of more than 500 seats have been acquired to respond to those needs. On the one hand, they will replace our classic Boeing 747s, currently operating to leisure destinations of mass demand. On the other hand, the new configuration will give us additional capacity.
The new aircraft will also strengthen our position as the largest leisure carrier in Russia and one of the largest in the world.
What are the prospects for Russian aviation in general? Can the infrastructure support planned growth?
In 2010, Russian airlines carried 57 million passengers, 33 million less than they did during the last year of the old Soviet regime. As a result, the potential to develop the Russian civil aviation sector is still huge, even given the present situation with airport infrastructure.
There are significant investment programs being carried out by state and private companies to develop airports and related infrastructure in many Russian regions. That’s why, from my point of view, airports shouldn’t be a limiting factor for the planned growth of the civil aviation industry in Russia.
Moreover, the dependence on Moscow airports is enormous at the moment. Nearly 90% of the country’s passenger traffic is concentrated there, indicating the lack of load in regional airports.
That’s why Transaero Airlines, in addition to flights from our hubs in Moscow and St Petersburg, is developing our flight network from other regions, including international flights from Vladivostok, Kazan, Krasnoyarsk, Khabarovsk, Samara and Ufa. In Yekaterinburg and Novosibirsk we have certified our own stations for maintenance, which means that we do not have to fly our planes to our hubs for checks. It gives us the opportunity to attract new passengers without additional load on central airports. All airports located in the Russian Far East have our assistance in acquiring the certification required to service and maintain our aircraft. Other Russian carriers are doing the same, so I strongly believe in the potential of civil aviation growth.
Transaero directly contributes to infrastructure development as well. Our company is at the forefront of many initiatives to support the modernization of airport infrastructure such as terminals and runways. However, serious investment is still required.
What changes are required in terms of regulation? Russia has traditionally been very slow to adopt global standards.
Russia has 144 active bilateral agreements that regulate flights by Russian airlines on international routes. About 79 of these have not been reviewed since Soviet times when only one airline was present in the country and it was in the USSR’s best interests to limit the number of airlines flying to and from the Soviet Union.
I believe that this is no longer valid and there are a number of major Russian airlines that are fully able to compete with foreign carriers on international routes.
Transaero is prompting the aviation authorities to reassess obsolete bilateral agreements. Routes linking Russia with other countries should be liberalized and more Russian carriers as well as foreign carriers should be allowed access. We strongly believe that there is no place for a monopoly on any route. Only competition can lead to stable development.
Do you support IATA Simplifying the Business projects and how easy are they to implement in Russia? What are the challenges you face?
Transaero certainly supports IATA’s initiatives aimed at simplifying the civil aviation business as they lead to significant cost savings. It’s worth noting that Transaero was the first Russian full-service airline to offer its passengers e-ticket service. And we now offer mobile check-in on most flights from Domodedovo.
Of course, Russian carriers face some difficulties and obstacles while implementing state-of-the-art technologies. Nevertheless, I’m confident that if a company wants to be successful, it must know how to solve problems. If not, passengers will look to its competitors.
What more can be done to improve the safety record in Russia?
Safety is the top priority for every airline. Regarding safety, there is no place for competition among carriers. That’s why Transaero regularly takes part in initiatives to exchange flight safety experiences among the airlines, state authorities, and research centers. The detailed work carried out preserves the highest possible level of flight safety.
Transaero has never had an accident during our history. As a result, we are ranked 10th in the rating of the world’s safest air carriers according to German research center JACDEC (Jet Airliner Crashes Evaluation Center).
In general, the level of flight safety among Russian carriers has grown significantly. It is crucial to introduce and improve safety management systems universally, to harmonize the rules for checks, and get more detailed flight accident and incident reports. The human factor is also very important: crew resource management must be developed further and close attention paid to the recruitment of pilots and technical personnel.
Can we have good security and yet still make the process easier for passengers?
This is a subject for a whole research paper. In my opinion, aviation security is just the final link in a very long chain. We cannot manage security purely at the airport, even with the most up-to‑date technologies. It is very important to improve the interaction between all the parties involved in counter-terrorism activities. This includes aviation security services and even encouraging the passengers themselves to pay attention to any suspicious activity. Countries and authorities must work together to decrease the terrorist threat as a whole.
Why are female CEOs so rare in aviation? Do you feel you face any unique challenges?
When I became General Director of Transaero, I sometimes heard that it was not a job for a woman. At the time, I was the first and only female in Russia heading an aviation company.
Of course, the aviation industry is traditionally male dominated. But it wasn’t my intention to prove to men at any cost that I was capable of succeeding at an airline. Actually, I just run a business that I love and understand well, and I take responsibility for our passengers and staff.
I carefully selected my management team, and I believe that top and mid-tier management in Transaero is the best in Russian civil aviation. By the way, all 12 deputies are male. They are great professionals and very reliable people.
As a matter of principle, I don’t believe that it is a case of men versus women in business. Instead, there are people who succeed and people who fail. I understand clearly that there are male and female priorities in life but I don’t believe this distinction exists in business.
What qualities does an airline leader require in the modern market? Is airline experience vital?
Experience shows that a modern airline leader should be a good manager, have deep knowledge of airline business specifics, and have the skills of a psychologist. The ability to build human relations inside the company as well as with the outside world is vital. I think it would be quite difficult for someone who has no experience of working in an airline to understand the specifics of this business. A mistake might cost too much.
What are your hopes for Russian aviation in the next decade?
Consolidation will continue in Russia, and 10 years from now mostly large and stable companies will remain in the market. Already this category of airline operates more than 90% of all flights in Russia.
I would also like to believe that there will be a level playing field for Russian airlines, including regional and low-cost carriers. At the same time, the Russian airline industry runs the risk of political instability in some regions of the world as well as the constant fuel price increases.
Of course, Transaero will do everything we can to remain a safe and reliable carrier. Thanks to the full commitment of our staff, a sensible business approach, and continued expansion, we have earned the trust of passengers and partners. That is something we intend to maintain.
For more information visit www.transaero.com