Monday, September 22, 2008

Window on Eurasia: Russia’s Aeroflot More Worried Its Brand than Safety of Its Passengers, Analyst Says

Paul Goble

Vienna, September 22 – After the recent crash of an Aeroflot-Nord 737 jet near Perm, officials at Aeroflot said they would no longer allow their daughter companies to use the company’s name because Aeroflot had to protect its “brand,” but neither the company nor the government haven taken the steps needed to make Aeroflot safe for its passengers.
Moscow commentator Vladimir Boyarintsev places the blame for this sorry state of affairs on Boris Yeltsin for the way in which he privatized the Soviet airline and on the current Russian government for its readiness to buy old planes abroad rather than producing new ones at home (
At the end of the Soviet period, he writes, Aeroflot was carrying 130 million passengers a year, making significant profits, and thus was “able to purchase 500 domestically manufactured planes” every year, thus ensuring that the fleet consisted of relatively new and consequently safer planes and that the air traffic control system was adequately staffed.
Yeltsin changed all that, Boyarintsev says, dividing Aeroflot into 440 different companies and privatizing them into the hands of his relatives. One of the consequences of this was that neither the firm nor the government provided the funding necessary to support airports or air traffic control systems.
But another, perhaps even more fateful result, was a decision to purchase Boeings and other aircraft produced in the West rather than support the domestic civil aviation industry. That might not have been such a disaster if the firms had purchased new planes, he continues, but most often, Aeroflot and especially its daughter companies bought used ones.
Many of these planes, he continues, should be replaced with newer planes, but that is not happening. Indeed, Boyarintsev notes, Russian aviation companies are replacing only three-tenths of one percent of their total number of planes, only “one-twentieth” of the rate Western airlines do. As a result, the current situation, already bad, appears set to get worse.
That is all the more likely to be the case if Russia goes ahead with plans to purchase more Canadian produced planes, something that Russian aviation experts say will kill off production of the AN -140, a Ukrainian-Russian plane intended for passengers and cargo on routes up to 3700 kilometers.
The Russian government has decided that it can simply use earnings from the sale of oil and gas abroad to purchase foreign-made planes, but that decision is doubly problematic, the Moscow analyst says, destroying a domestic capacity and raising questions about what Russia will do when its petroleum resources run out or the price falls dramatically.
When the 15-year-old Boeing 737 crashed outside of Perm earlier this month, that should have been a wake-up call for Aeroflot, but the reaction of the company has been anything but encouraging, Boyarintsev says. Instead of recognizing that its reliance on foreign planes was a mistake, Aeroflot management took steps only to defend its reputation.
A company spokesman said that recent crashes of planes operated by the baby Aeroflots had had a negative impact on “our brand. And we have decided that it is time to block [their] use of the Aeroflot brand” for their companies and their planes. That may make Aeroflot’s management happier, he says, but it won’t make the planes flying there any safer.
And while Boyarintsev does not address this problem, the decline in the number of airports and in public confidence in civil aviation in the Russian Federation in recent years is hitting that country especially hard, not only because of the enormous size of the country but also because of the absence of roads in much of it.
Indeed, for many communities far from Moscow, Aeroflot was the chief integument linking them to the rest of the country. Given the mounting problems of both the parent and daughter companies, that tie is weakening, with all the economic and ultimately political consequences such a change is likely to have.

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