Air Transport World

Leading the change in Russia: Sibir Airlines has used mergers and acquisitions to propel itself into the top spot among Russia's domestic airlines and No. 2 overall. (Profile).

When Vladislav Filiov was elected general director of Sibir--Siberia Airlines--in February 1998. he realized there was a lot to learn. He had served as a major in the army before taking up a management position in an oil company. When his company found itself with a significant holding in the airline, he was tasked with turning it into something worthwhile. In 1997, Sibir, based in Novosibirsk, the largest city in Siberia with a population of about 2 million and the third-largest in Russia, carried 609,226 passengers, placing it sixth in the then-shrinking Russian market.

Filiov began by finding out as much as he could about the airline industry. In his first interview with ATW several years ago, he spent about four hours answering questions and a day asking them. He soon realized that the revenues and traffic volumes of Sibir were insufficient to achieve the critical mass needed to guarantee long-term survival and set out co change that.

He began by looking at other local carriers, most of which were quite small and existed primarily to provide regular--if infrequent--air links from remote locations to Moscow. He set about persuading the administrations of these towns that it would make sense to link with Sibir with guarantees that services would be continued. Sibir also would take over financial responsibility for their aircraft, removing the often-substantial losses borne by the towns under the still-common system of airline ownership.

In 1999, Sibir took over Irkutsk-based Sayani. With a population of 500,000, the eastern Siberian city became the airline's second hub and a network of routes was built around it. …

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