The head of "Ural Airlines" - RBC: "We will not be torn apart alive"

The main owner and CEO of Ural Airlines Sergey Skuratov told how passengers increased the number of flights on non-working days,how much the company lost due to forced flight delays and about the main task of RUSSIA Sergey Skuratov

Increase in flights on non-working days

Financial losses due to flight delays

Restrictions on flights abroad with valid permits of the Federal Air Transport Agency

On the recovery of financial performance after the start of the pandemic

About the intention to repay all loans

About competition in the air transportation market

On the possibility of creating a low-cost division

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On the attempts of the Red Wings to “buy out” the pilots of Ural Airlines

On the risks of a new lockdown

About the main condition for the energy transition in aviation

“People are tired of sitting in apartments, so they took the children to rest”

- Due to the increase in the number of cases of CORONAVIRUS, non-working days were introduced from October 28, in some regions this regime was extended. How has this affected your company?

— Those services of the airline, which are necessary for its round-the-clock activities and flights, worked. And, for example, the financial service and a number of others rested.

- Do you notice that people, instead of staying at home, on the contrary, flew to resorts?

- This is true. We are seeing growth in demand across the board. This is especially true of the Crimea, Sochi, Minvod. People are tired of sitting in apartments, so they took the children to rest. On our aircraft, passenger seat occupancy is now more than 80%, and on non-working days, the load has remained at the same level. In nine months [2021], we increased the volume of traffic on Russian routes by 33% [against the same period in 2019]. I'm talking about 2019, not 2020, because the last year in the history of aviation is blackened out. Comparing current performance with him, demonstrating wild percentages [of growth], is pointless. In 2019, there was a real economy.

- What part of the airline's staff is vaccinated against COVID-19?

- We have 82% of the airline staff vaccinated. I have personally been vaccinated with both Sputnik V and the Pfizer vaccine. I have a lot of business trips, and I just need to be an example. Both vaccines were tolerated without any problems.

Do you limit your contacts?

- Of course. In our office, no one walks without a mask, it is prohibited by law. Step aside - and execution (). This is all rigorously set, so out of a team of 3.6 thousand people, only eight or nine people get sick from time to time.

- Have you encountered an increase in sick leave for aviation personnel? For example, Utair had such a problem in the summer.

- The maximum number of infected people in the summer period was 29 people. We have set up a vaccination room at the airline itself, and people go to get vaccinated all the time. If someone is sick, we track everyone - we are very kind to the members of our team, we protect their HEALTH.

— And how do you convince anti-vaccinators?

- I'm not stroking my HEAD. I am sometimes hard ().

Do passengers fight over masks on airplanes?

- At first [scandals], but now everyone is used to it. The flight attendants are demanding. Aircraft ventilation systems change all the air several times a minute. You can get infected there [only] if a person sits next to you and sneezes the whole flight. An airplane is one of the safest places on the planet from covid-19 , so fly airplanes and don't think about anything.

What is known about Ural Airlines

Ural Airlines appeared on the basis of the Sverdlovsk air squadron, created in 1943 with the Koltsovo base airport. It has been operating under the existing brand since 1993.

Initially, flights were carried out only on Russian-made aircraft: An-24, Tu-134, Tu-154 and Il-86. But in 2006, the carrier began to update the fleet by ordering Airbus A320 liners. Now the company has 51 aircraft.

Ural Airlines, which operate flights within Russia, to the CIS countries, Europe and Asia, is one of the five largest Russian carriers (after Aeroflot, S7, Pobeda and Rossiya). In January-September 2021, the company transported 7.19 million people.

According to SPARK, Sergey Skuratov owns 90.47% of the company. Another 1.66% - at the "daughter" of "Ural Airlines" "Wings of the Urals". The remaining shares are owned by 20 individuals, including Skuratov's son, Kirill (0.0006%), who holds the post of first deputy general DIRECTOR and commercial director.

Photo: Mikhail Tereshchenko / TASS

— Before the pandemic, you developed at four main airports — Koltsovo (Yekaterinburg), Domodedovo, Pulkovo (St. Petersburg) and Zhukovsky. What changes did the pandemic make to this model of yours?

- We have kept all four bases, as we have our own aircraft maintenance centers in them. This makes it possible to maintain their serviceability at a high level, and the flight time of each aircraft remains high even in winter.

- Ural Airlines is the only airline from the top 10, which is based in Zhukovsky. Who asked you to?

- Zhukovsky is Rostec, and Rostec is a solid organization. Probably, after analyzing the Russian airlines, they offered us a base as the best carrier. Immodest, right? (y).

— What are your preferences in Zhukovsky?

- They are not here. Like any other company flying from Zhukovsky, we work on standard terms. We are satisfied with the base at this airport - this is an additional market.

— You said that you have a maintenance center at each of your base airports, but at the same time, in Zhukovsky, you have not implemented a project to build your own hangar. Why?

— We did some pre-project work: we drew the configuration of the hangar complex with all the necessary services, and so on. But there are difficulties in Zhukovsky - the land at the airfield belongs to three owners. I would like to buy land from Rostec, and for this Rostec needs to combine land property and offer us a package offer for land. In the construction of such expensive facilities, land is the most important element. Investments [in the hangar complex] will amount to at least $25 million. The project is scheduled for 2023.

“Due to delays, we lost 100 million rubles.”

— 2021 is a bad year for Ural Airlines in terms of flight regularity. How much did the flight delays, compensation to passengers and payment of hotels for them cost?

- Sometimes the press presents not the same delays that are recorded by the Federal Air Transport Agency. The regulator has a certain calculation methodology. For example, the 15-20 minutes it takes to taxi [an aircraft] is normal. And the time that is on the ticket is not the time of take-off, it is the time of closing the doors [of the aircraft]. Everyone had a problem with regularity this year, except for Aeroflot. He is well done, how the clock works.

Why were there delays?

- There are many reasons. For example, we did not receive four Airbus planes on time, and tickets for them were sold. The cars arrived two to four months late. But we couldn’t abandon the passengers, and if there were delays, we fed, watered, settled in hotels.

Another reason is airports. In a pandemic situation, they were forced to reduce staff and fired many specialists. When traffic in Russia reached its peak, the number of various airport services turned out to be insufficient. There are cases when workers were hastily searched for and hired according to advertisements in newspapers, and this, unfortunately, is not the level of specialists. For example, there was a catastrophic lack of workers to load food on board, remove the aircraft, and place cargo. Similar failures systematically occurred at Koltsovo and at many other airports, they just somehow keep silent about this and blame only the airlines for the delays. As a result, due to delays, we lost 100 million rubles. Nevertheless, we overcame this situation, carried out a lot of organizational work, changed the technology of flight preparation and maintenance, the schedule has been adjusted. Today, the regularity of flights in the airline is 98%.

- How did this affect loyalty to Ural Airlines?

“Of course, we conducted surveys, and it was bitter to hear the different opinions of people, although the percentage of disappointed passengers was not counted. We understood that we were causing inconvenience to passengers, apologized and answered all letters, made compensation and tried to establish a dialogue. In the end, everything worked out.

“We would like to have more opportunities to fly abroad”

— Your airline operates subsidized flights to Kaliningrad, Simferopol and the Far East. How much budgetary funds will you receive for your work on these programs in 2021?

— About 3 billion rubles, which is significant. All these subsidized flights are a very important thing. This allows, for example, to connect remote territories such as Kaliningrad, Blagoveshchensk with the European part of Russia. Discount tickets are needed here, the state helps in this, which is methodologically absolutely correct.

Photo: Igor Onuchin / RIA Novosti

— Will you increase the program of subsidized flights in 2022?

— We made an application for more than 3 billion rubles. If it depended on me, then we would double the volume. But there are problems with subsidized flights from Yekaterinburg to Vladivostok, Khabarovsk, Petropavlovsk-Kamchatsky. They are simply not in the program. Flights from the Far East are subsidized only to Moscow. And why only to Moscow? From Yekaterinburg, we would also carry the Far East to the south and abroad, because we have a very wide geography of flights from Koltsovo. If we are talking about the need to reduce the volume of traffic through Moscow, then we need to give subsidies to Yekaterinburg - in this way many problems will be solved. We have addressed this initiative to the Ministry of Transport, but so far we have not found understanding. Apparently, the budget of the program itself is limited, so all funds go to the capital.

— What is happening with your flights in the CIS?

“Our volumes have fully recovered. Plus 5% [to the indicators of 2019].

— Are you satisfied with the current distribution of permits for international airlines?

We would like to have more opportunities to fly abroad. Unfortunately, due to the decisions of the operational headquarters, we cannot currently use most of the permits that we are given.

The main task of Russia today is the recognition of the Sputnik V vaccine. As soon as it is recognized, tourists will fly. In the meantime, the situation has developed that there is a permit for flights, but we cannot fly. Very few flights to non-CIS countries are allowed on medium-haul aircraft. For Aeroflot, maybe there is the Dominican Republic and other countries, but this is not our market. For us, the first and most important thing is Europe: Italy, Spain, Germany and so on. The fact that Russians are practically unable to get there is a problem.

— Before the pandemic, CHINA was probably the most significant foreign market for you . Did he manage to find a replacement?

— It is simply impossible to find a replacement for this large and serious market. Now it does not exist for passenger transportation. We are trying to engage in cargo air traffic, on October 29 the first flight from Wuhan to Leipzig was made, we took medical tests. However, there will be no such number of flights as in 2020, when 15 of our aircraft operated on this market. In 2021, at best, we are talking about two or three cars for transporting goods. Now China, due to the pandemic, is restricting flights to itself, including cargo flights.

— How much money have you lost because of China?

- We lost 1 billion rubles. Such transportation supported us during the most acute periods of peak loads.

“Stop fighting for the number of passengers, it does nothing for anyone”

- In August, the airline reported that operating indicators were approaching the pre-crisis 2019, and the main financial indicators did have a pronounced positive trend. Has the company overcome the crisis?

From a financial point of view, yes. In the nine months of 2021, our revenue increased by 11%, profit before tax increased by 5 billion rubles, amounting to 8.4 billion rubles. Net profit - by 4 billion rubles, we received a net profit after tax of about 7 billion rubles. But we are not getting 3% of passengers to the [level] of 2019.

Sergey Skuratov (Photo: Press Service of Ural Airlines)

- It is generally accepted that the fourth quarter for passenger aviation is very bad. Will he drag you down? How do you plan to end the whole of 2021?

- Of course it will. We assume that for the year the profit will be about 5 billion rubles. with a normal development of events (the company received 2.09 billion rubles of net profit in 2019, in 2020 - a loss of 5.85 billion rubles -). If new lockdowns are introduced, the forecast may be adjusted.

— But domestic air transportation, as it is believed, can only generate losses.

- Internal lines are effective at the very minimum or to zero. In the fourth quarter, a significant part of the internal lines will be unprofitable. But we have our own methodology on how to solve this problem, there is a cut-off point for the cost of a flight hour. If the efficiency of a flight falls below this point, we close flights. We believe that unprofitable flights should be closed in the fourth and first quarters. Stop fighting for the number of passengers, it does nothing for anyone. Passengers will fly anyway.

— Lay up the aircraft?

- We will not put anything on a joke. There is an estimated amount of aircraft required for the winter schedule. We traditionally send machines that are not needed for its implementation to our technical center for deep maintenance. In winter, four or five aircraft are constantly in the hangar complex. Of course, the flight time for each aircraft is reduced, but it is quite reasonable. And we let the pilots go on vacation, we let the flight attendants go. The rest are all loaded and receive a decent salary.

- What is the flight time of your planes in summer and winter?

- In summer, the flight time reaches 500 hours per month for an Airbus A320 neo. A321 neo fly a little less, but also a lot, somewhere around 470 hours. Aircraft of the A320 ceo family fly about 400 hours. Throughout the park, in winter, the average flight time will be about 360 hours per plane.

— Some top managers of airlines claim that fewer passengers flew to Turkey and Egypt than they had hoped.

— These are no longer the super-super directions that we had five years ago. There is a sufficient fare, a lot of passengers, but, of course, we expected more. This is due to many factors. First of all, these include the negative expectations of the passengers themselves, who are forced to worry whether they will fly or not, and if they do not fly, how to return tickets. Therefore, passengers were very cautious about these destinations. After all, Sochi, Anapa, Simferopol are always open. Based on reliability, the majority preferred our resorts.

Five facts about Sergei Skuratov

Sergei Skuratov was born in 1950 in Sverdlovsk. He graduated from the Buguruslan Flight School, a graduate of the Academy of Civil Aviation with a degree in Pilot Engineer.

In 1970, he became a co-pilot on an An-2 aircraft in the 2nd Sverdlovsk Joint Squadron.

Since 1975, he worked in the Sverdlovsk aviation squadron, went from pilot to squadron commander.

In 1984 he was appointed Head of the Flight Safety Inspectorate of the Ural Civil Aviation Administration.

Since 1993, he has been the permanent head of Ural Airlines.

“We have the opportunity to repay all loans today”

What is the current debt of the company? And who are your creditors besides Sberbank?

We have reduced all borrowing by 66% in 2021. Today we have the minimum amount of credit resources left - 1.24 billion rubles. We deal with them easily.

- Why did you cut it? How were they paid?

— Of course, only by increasing efficiency. No other options are provided. You make a profit - you reduce credit resources. This is how the economy is built, at least in the market. We have the opportunity to repay all loans today.

- You don't need it?

Not yet, but we will get there. Not now, maybe in two or three years, when the airline will use credit resources only for investment projects. In a normal life, one must learn to live by one's own means without loans. This is my conviction.

Ural Airlines received a loan from Sberbank after applying to the authorities Business

— Are you continuing the cost-cutting program?

- Of course. There are two programs - income increase and cost reduction. They sometimes don't match at all. We always choose the best solution. Both programs are worked out in great detail, we brainstormed “in an adult way”, and we succeeded.

- Can you give an example of what happened?

“Our service center has a total of about 600 employees and has not increased from 2019 to 2021, even shrinking slightly in 2020. But all the years before the start of the pandemic, we handed over part of the work at Domodedovo to S7 Technics, thinking that we couldn’t handle it ourselves. As a result, we managed both in 2020 and 2021, and we do all the maintenance at Domodedovo ourselves, due to which we saved a huge amount of financial resources.

Did you save money on passengers?

- We give the passenger everything that is supposed to be, without any questions. Never argue, the passenger is absolutely always right. We save only on our own staff and optimize internal business processes.

Photo: Maxim Tumanov / TASS

— Are there opportunities to continue cutting costs now?

- I think that on November 20 two new programs on income and expenses will be signed. But I will not reveal their main provisions, because we should still have at least some trade secrets ().

"We will not give ourselves to be torn to pieces"

- Before the pandemic, you said that only Ural Airlines and S7 Airlines operate according to market laws. Has your position changed?

- Not. I still think it is.

 - Was it right for market competition to provide special support to Aeroflot in 2020 - through an additional issue, the airline attracted more than 80 billion rubles?

— В той критической ситуации это было правильное решение государства. Была вероятность, что без господдержки «Аэрофлот» просто схлопнется. «Аэрофлот» — базовая компания страны, выполняет 50% авиаперевозок, такая поддержка обоснованна. Правда, хотелось бы, чтобы такая трепетная любовь была и ко второй половине гражданской авиации. Один «Аэрофлот», к сожалению, не справится с Россией. У нас слишком большая страна.

The Ministry of Finance reported on the purchase of Aeroflot shares for ₽40.9 billion from the funds of the NWF Business

— At the Innoprom-2021 exhibition, you said that Sberbank is not only your lender, but also an assistant in the implementation of bold ideas. Have you discussed with this bank the possibility of supporting your company in case of a critical situation?

— We have a reasonable relationship with Sberbank. They calculate the airline very carefully and in detail. These are perhaps the best analysts. Now we have signed a good credit line with Sberbank. We use it a little for the very best, but we always have the opportunity to take credit resources.

- How many can you choose if necessary?

— We signed a credit line for 3 billion rubles. Plus, the airline still has certain deposits (on the accounts of the airline as of November 1 - 4.2 billion rubles). If there are no lockdowns, we will have enough.

- There is an opinion that in case of a bad situation on the market, Ural Airlines may need to be reorganized. Aeroflot is backed by the state. S7 is implementing the Citrus low-cost project with the support of Minister of Transport Vitaly Savelyev. Behind Utair are the structures of Surgutneftegaz and Rossiya Bank.

“Working in the market, we understand all its dangers, both political and economic, and we try to build our activities taking into account these reference points. There is, of course, such a Japanese proverb “a protruding nail will be driven in”, but we will still fight. As for the Minister of Transport, I am absolutely sure that Mr. Savelyev is interested in having effective airlines in Russia. He is also responsible for the entire country, and not just for Aeroflot, as before. Therefore, I am philosophical about your opinion. We soberly assess our capabilities, we understand that everything is possible, but we will not be torn to pieces alive.

Sergey Skuratov (Photo: Press Service of Ural Airlines)

- Do you, as the main owner of Ural Airlines, allow entry into the capital of a partner company or a complete sale of your block of shares?

— Today, the airline has 1.5 thousand shareholders, which is a large team, and we treat each of them with respect. Yes, I have a fairly large package, but it's good, it's manageability. Further expansion of the number of shareholders is probably theoretically possible. But why do it? If for the sake of some large structural projects, then it is possible. And just like that - I do not see the need.

Any business is for sale. How much do Ural Airlines cost today?

We made a similar assessment three years ago. They valued it at a good amount, which I will leave out of brackets, since the company is not for sale.

— Which approach is closer to you ideologically — to place part of the package on the stock exchange or to sell shares to a strategic partner?

- Both that, and that. But the sale is possible when financial resources are urgently needed, which banks do not give you. Then there is a sale, and money is obtained for living. We have enough financial resources. The implementation of huge projects, for example, the acquisition of 20 wide-body vehicles, is not in front of us now either. There are theoretically such projects, but talking about them in the context of a pandemic, the fall of global aviation is just childish.

“If there is a need, we will deal with low-cost transportation”

— According to the CEO of S7 Group Tatyana Fileva, from July 2022 Citrus plans to carry passengers on interregional flights, bypassing Moscow and St. Petersburg. How reasonable do you think this concept is?

“We don't do that. The economics of the project may develop in such a way that everything will end with state subsidies.

— How will you respond to the new low-cost airline?

- We will think about it. As far as I know, not such a huge number of aircraft are expected there. I wish this project only the best. Forward, forward, forward!

S7 announced the launch of a low-cost airline in July 2022 Business

- Do you agree with the opinion of Andrey Kalmykov, head of the Pobeda airline, that there is only one low-cost airline operating in Russia now?

— I respect Kalmykov, he created a fantastic airline. Indeed, there is only one low-cost in Russia today, this is an axiom. Another question: is it possible to create more? Probably you can.

In 2020, we tried to make a low-cost transportation model for part of flights across Russia from Zhukovsky, and we succeeded. We have three or four aircraft flying in this mode. But until we do this, we are in favor of building an airline that will be a convenient means of transportation for passengers of any category, from business to economy class. If there is a need, we will transfer part of the fleet for low-cost, it's easy.

— So now you are implementing a hybrid model?

- Of course. Like Aeroflot, which, in fact, operates in a hybrid version. He has economy, business class and so on. And "Victory" is allocated for the low-cost.

- Ural Airlines reported that the availability of flights on domestic flights of the airline in the first half of 2021 increased due to a reduction in fares by an average of 400 rubles. compared to the same period in 2019. What was the main reason for the decline in ticket prices?

- For nine months, the tariff reduction amounted to 500 rubles. by 2019. We have reduced tariffs through two programs that we discussed earlier. One of them is cost reduction. It's impossible to think of anything else.

Photo: Kirill Kallinikov / RIA Novosti

“But carriers need to increase the cost of tickets in order to raise revenues, and this is impossible, since there is an excess of carrying capacities on the market. How to be further?

- There is an excess of tanks, there is nowhere to put the planes. Some airlines, including Ural Airlines, are receiving more new aircraft. Therefore, we will probably work in a market with an excess of capacities in 2022. If international flights are opened, and Sputnik V is recognized in Europe, everything will fly quickly and everything will be restored.

We will increase the fleet. In November-December we will receive four A321neo aircraft for 240 passengers each. These cars have excellent fuel economy. At the end of the year, we will return two cars from the existing fleet to lessors. That is, in 2022, our fleet will grow by two aircraft, so we will fly 53 aircraft. And all of them, I assure you, will fly intensively. This is the essence of our effectiveness.

- Do you have a lot of business class seats left? How popular are they during the pandemic?

“We have always had a limited number of business class seats on the plane. Each of them has from eight to twelve, and there are just over three hundred of them. Employment in business class - 80%. This is a fairly efficient segment of the business. We will not make more chairs.

“Setting a wild salary for Superjet pilots is bad”

- Since the fall of 2020, Red Wings has been based in Koltsovo with Superjet aircraft. How do you like this neighborhood?

- The Red Wings are good guys who operate the planes, receiving good subsidies for them. They fly on other routes that we have not flown and will not fly.

- According to RBC, they lure your staff with good salaries.

- Our position is as follows - everyone prepares pilots for himself. And setting a wild salary for Superjet pilots thanks to subsidies - higher than for Airbus - is bad. You need to earn money by work, then you will appreciate it. The logic of world civil aviation has always been like this - the greater the passenger capacity of the aircraft, the more its pilots receive, and not vice versa.

The head of the Federal Air Transport Agency explained the reasons for the delay in certification of the Boeing 737 MAX Business

Are you still interested in Boeing 737MAX aircraft?

— We plan to get them under operational leasing from Sberleasing. We fought with Boeing for a year and a half to conclude an agreement and got good conditions. But the plane has not yet been certified in Russia. There will be certification, there will be planes. The planes are very good, they fly an hour further than Airbus, so with these planes, with a full load, we will be able to fly from Moscow to the south of China and to India. Thanks to the operation of aircraft from two manufacturers, we will be able to get even more competitive prices for them.

— Previously, you had plans for a wide fuselage, you were interested in Airbus A330 aircraft. Was this idea abandoned?

- The idea is there, but the time has not come to implement it. We will return to it when we defeat the pandemic.

“New lockdown for civil aviation is close to disaster”

— To increase resilience against the backdrop of falling traffic due to the COVID-19 pandemic, the government allocated RUB 20.95 billion to airlines in 2020. How much of this amount did Ural Airlines receive and does the industry need state support now?

— We received 1.834 billion rubles. So far, such state support is no longer needed. But, if it is, it must be distributed to all airlines without restrictions.

- Ural Airlines actively flew to Georgia, but after the closure of this market in 2019, they did not receive compensation. Is this already a closed issue?

There was a promise, but the money was not received. And we probably won't get it. In our case, we are talking about 2 billion rubles.

- In the second half of 2021, EXPORT prices for jet fuel exceeded the level of 53.25 thousand rubles. per ton, and for the first time since the launch of a damping surcharge on kerosene in 2019, Russian airlines can receive compensation from the state for expensive fuel. What compensation do you plan to receive by filing a tax return?

- These are just toys. Of course, we submitted the declaration and will receive 22 million rubles in September. These are pennies, and now there can be no talk of any deduction of the cost of the ticket. Try to guess where is the highest price of kerosene in Russia?

- Bay of the Cross, Petropavlovsk-Kamchatsky, Koltsovo ...

- Of all the airports from which we fly very actively, one of the highest prices for kerosene is in Simferopol. It is on average a quarter higher than in Moscow. Surprised?

Is such a high price associated with the risk of sanctions due to work in Crimea?

 - Probably. Only one fuel supply operator works there, and there are certain problems in this. It will probably get fixed someday. We give discounts to children, disabled people, talented children, musicians, dancers, athletes who fly to Simferopol. At the same time, the price of kerosene is the highest. Maybe this is not entirely true?

- If the pandemic develops according to a bad scenario and a new lockdown is announced that will affect transport, what will you do?

- It will be very difficult, even if Moscow alone introduces a lockdown. For transport and civil aviation, this is close to disaster. Therefore, if there are lockdowns, state assistance is vital if we do not want to ruin civil aviation.

“The main condition for the energy transition is the convergence of the cost of different types of fuel”

— You have been working in civil aviation since the 1970s. Is the industry more politicized now than it was then?

- Then everything was controlled by the CPSU and was done by order. I, being the commander of the [Sverdlovsk] joint air detachment, without the permission of the Ministry of Civil Aviation, could not build a public toilet on the street. I traveled for three months, persuading the deputy minister to give money. Although the Sverdlovsk United Aviation Squadron has always been a donor, this is how financial resources were distributed.

Now how much you have earned is what you control to one degree or another. So we built a maintenance center [in Koltsovo] — it's fantastic! For 30 years a German submarine hangar stood there. Il-18 did not enter there, the tail stuck out. We bulldozed the sheds standing nearby and built a state-of-the-art hangar complex for $25 million. I didn't ask anyone, I took a loan and built it, then I returned [this] loan.

Sergey Skuratov (Photo: Press Service of Ural Airlines)

- Do you have any nostalgia for a planned economy for civil aviation?

- In no case. We only look ahead. Ural Airlines operates at the level of any Western airline, we are integrated into the global economy and are able to survive in it.

— On November 10, 2020, Aeroflot CEO Vitaly Savelyev became Minister of Transport. A year later, do you feel any changes that have taken place in the approaches of the Ministry of Transport to the management of civil aviation?

All changes are positive. More energetic work, more specific tasks [are solved], and everything has become livelier. So with his arrival at the Ministry of Transport and experience at Aeroflot, everything only benefited.

— How do you feel about the initiative of the Russian authorities to use predominantly Russian software in the industry?

- There is a government decree, the state is doing everything absolutely right. It is necessary to store data in Russia, there is no doubt about it. Another question is that there is a necessary set of services that this or that system [booking tickets] can provide to an airline. We fly a lot abroad, and it is important for us that the sales system works in any country in the world. When using the Russian system, mismatches may occur. But I think everything will be decided, there is still time [until October 2022].

I don’t know yet how we will proceed further - we will switch to the Russian system or stay with Amadeus, which has rebuilt and fulfilled almost all the requirements of the authorities. Aeroflot and Sibir (S7) remain in Western systems because they are members of global alliances.

- Ural Airlines also received a proposal several years ago to join the global alliance. Why did you refuse?

- Perhaps we will return to this, but with the absolute peace of world civil aviation. Turbulence today. The question is very open when European aviation will recover to 2019 levels.

The authorities urged airlines to provide for the registration of aircraft in Russia Business

— What do you think about the mandatory registration of aircraft in the Russian register starting from 2023?

- All European countries have their own registry, and Russia needs to do this. There are certain shortcomings and nuances, but they can be overcome, the Federal Air Transport Agency will cope with this. For us, by and large, it doesn’t matter whether the [country of registration] will be Ireland, Bermuda or Russia . If it is necessary to register aircraft in our country, we will do it.

“But lessors care.

- It is necessary to work with lessors, and this should be done by the Federal Air Transport Agency. So far, we do not predict that there will be additional costs for carriers. I think that we need to work out all the subtleties with lessors and they will agree to registration in the Russian register. Nothing wrong with that.

— Do you set targets for carbon neutrality for your company (equality of harmful emissions emitted into the atmosphere and extracted from there)?

“We are trying to work it out. But now the price of biofuel is several times higher than jet fuel, so it is not yet very clear what to do with the economy of the airline. But I agree that we need to aim for less carbon emissions. We will participate in this process, this is more or less realistic in the coming years.

For hydrogen fuel, new engines are needed, this is a serious global problem. There will be hydrogen engines, hydrogen fuel, we will fly on hydrogen. But the energy transition [in aviation], which could take place over a 10-15 year horizon, is a catastrophic increase in costs. The main condition for the energy transition is the convergence of the cost of different types of fuel.