Big changes in store at Aeroflot

Big changes are happening over at Aeroflot - a new CEO, no more Russian jets, better in-flight service, and a plan for a slimmer company (as well as slimmer flight attendants). And if you have a complaint, simply email the CEO himself.

By the end of this year, all of the airline's Tupolev Tu-154s - previously the backbone of the medium-haul fleet - will be retired, replaced by Airbus A320 family aircraft. The airline also has retired its Ilyushin Il-86 fleet (to be replaced by three leased MD-11s), leaving the Ilyushin Il-96 as the sole Russian type left. Aeroflot has been itching to get rid of those for a long time, as they're rather expensive to operate. The Il-96s will leave the fleet by October, along with the Tu-154.

Meanwhile, the airline, like most others, is struggling to cut costs. CEO Savelyev revealed in an interview with the Russian business paper Vedomosti that 40% of the airline's routes are unprofitable, with the worst being Moscow-Los Angeles, losing $14 to $21 million a year. "But we aren't looking at abolishing the route," he said, stating that the airline is closely reviewing all costs and is planning on making money on the route by June 2010. "If there's demand and good capacity, then why dump it?" The airline is also seeking to slim down, and plans to trim 6,000 of its 15,000 employees. "This number doesn't come from the ceiling," said Savelyev. "We invited the international consulting firm Bain to develop a new corporate structure... The optimal ratio is 1 million passengers for every 1000 employees. In 2008, Aeroflot carried 9.2 million passengers, so the company should have just over 9000 people."

The size of the company itself isn't the only thing that Savelyev wants to make narrower; he's set his sights on the airline's flight attendant corps. “These will be very eye-catching, very striking girls,” he says in the Moscow Times, which reports that they will not exceed a Russian size 48 (US, 12 to 14). New uniforms are also in the works, with orange on the way out: “A sociologist told us that, unfortunately, the color of our old uniforms was a repulsive color, that it made passengers nervous." His son, studying in England, sent him a video of Virgin Atlantic flight attendants (seen here on YouTube); "in bright red they look like professional models," he said. In-flight service is also looking to get a much-needed overhaul; apparently a Singapore Airlines hospitality trainer flew on a couple of Aeroflot flights to judge the service. “We scored a C plus or a B minus," said Savelyev, "but the good news is that our mistakes are easily correctable."

The familiar hammer-and-sickle logo will still be around, though - Savelyev has said that he "likes" the "bird with the hammer and sickle." Back in 2003, when the airline introduced its current color scheme, branding experts suggested that the airline drop the logo since it carried rather negative connotations. The first planes to get the new livery actually flew around for awhile with the logo applied as a sticker, so that airline management could get rid of it if desired. But the hammer and sickle wings are so synonymous with Aeroflot that the airline decided that they might as well be retained, the last vestige of the airline's Soviet past. Things have changed - for example, customer service. "As for all of the complaints," said Savelyev, "passengers can write to my email address, which is listed in the Aeroflot in-flight magazine.

photo by Aleksander Markin from Flickr, licensed under the Creative Commons

7 comments:

The CF said...

$14m to $21m loss on the LAX flight?!? I don't remember how frequently it operated last winter, but it's scheduled to run about 4.5 times a week over the next year. That's 234 flights per year at a loss of between $60,000 and $90,000 per flight. The 767s have 229 seats, so they're losing $262 to $393 on every single seat that flies.

And they aren't considering dropping the route?!

Tom said...

A good question. Aeroflot claims that they can make it profitable within a year, but even if it can't, perhaps they'll continue to fly it because it's LAX. I'm not sure why they're losing so much there.

On a side note, I'm pretty sure that LAX-SVO is the longest nonstop 767 route.

The CF said...

LAX generally doesn't work deep into Europe. We only have European nonstops to LHR, FRA, MUC, CDG, AMS and ZRH these days.

James said...

I am a bit confused. At the top you say that the airline will have no more Russian jets, but they are still flying the Il-96? Isn't that a Russian plane?

Thanks!
Jim

Tom said...

Ah, thanks for pointing that out. It should be "almost no Russian jets," and even though Aeroflot does want to get rid of the Il-96 and its rather steep operating costs, they are still flying a half a dozen of them for the foreseeable future.

Tom said...

Actually, I take that back - it appears that the Il-96 will be taken out of service in October, along with the Tu-154. See http://www.scramble.nl/forum/viewtopic.php?f=47&t=49499

Ordie said...

Los Angeles has a large ex-pat population of Armenians, Persians and Russia.

Aeroflot could make a good marketing effort for direct flights from LAX to Yerevan, Tehran and other points within Russia via Moscow.

Moreover, shipping Russian and Armenian goods to the ex-pat population in LA.

Its major competitor is Lufthansa and Aeroflot would need to step up its standards to make it profitable.