
- •How political connections of russian transportation firms influence their international activities
- •Introduction
- •Improvement of fiscal policy in transport is carried out in the following areas:
- •Companies’ analysis rzd Russian Railways
- •Internationalization3:
- •Transneft
- •Aeroflot
- •Internationalization:
- •Freight 1
- •Internationalization:
- •Transaero
- •Internationalization:
- •N Trans Group
- •Internationalization:
- •Moscow Metro
- •Internationalization:
- •TransOil
- •Internationalization:
- •Internationalization:
- •Internationalization of cargo and passenger transportation:
- •Volga-Dnepr Group
- •Internationalization:
- •S7 Airlines
- •Internationalization:
- •Federal State Unitary Enterprise State atm Corporation
- •Internationalization:
- •Sovkomflot
- •Internationalization:
- •Mosgortrans
- •Internationalization:
- •Internationalization:
- •Caspian Pipeline Consortium
- •Internationalization:
- •Central Suburban Passenger Company
- •Internationalization:
- •Sovfracht-sovmortrans
- •Internationalization:
- •Independent Transportation Company
- •Internationalization:
- •Isr Trans
- •Internationalization:
- •Mostransavto
- •Internationalization:
- •Ural Airlines
- •Internationalization:
- •St Petersburg Metro
- •Internationalization:
- •Eurosib
- •Internationalization:
- •Conclusion
Internationalization of cargo and passenger transportation:
Country |
Russia, Ukraine, |
Year of entry |
NA |
Industry/ business area |
River transportation |
Entry mode |
Brownfield, FDI |
Motives |
The main strategic principal of AEON activities is to restore and develop certain enterprises in various segments of economics., i.e.: - to provide additional investments; - to carry out crisis management actions; - to comprehensive reorganize; - to introduce new technologies; - to search for the new directions of development; - to assist enterprises against hostile takeover bids. So, development and profit growth are main AEON motives for both diversification and internationalization. |
Firm specific advantages used on the foreign market |
Irregular solutions, team of highly professional managers |
First mover or follower |
Follower |
Type of state involvement in the process of internationalization |
State as a controller that has to make sure that all acquisitions are appropriate and do not violate antitrust regulations, etc |
Evaluation of the success of the internationalization |
Company should not be considered international, as its almost all operations are within domestic country (Russia). |
Volga-Dnepr Group
State influence:
Over 20 years, Volga-Dnepr Group has been successfully representing the Russian airfreight industry in the international market. The Group is the world leader in the unique, oversize and heavy cargo market. It includes two leading airline cargo companies – Volga-Dnepr Airlines and AirBridgeCargo Airlines – which have been honoured with the prestigious “Wings of Russia” national aviation award on many occasions. The Group employs 3,000 staff worldwide and has representative offices in nine countries21.
Group is private. Russian government has tried to help via subsidies the company to internationalize and was interested in this internationalization as the Group’s activities are important for the country.
Internationalization:
Country |
UK, USA, China, Ireland, Germany, and many others |
Year of entry |
1994 – The Volga-Dnepr China subsidiary was established in Beijing (today group has two sales offices in Beijing and Shanghai); 1996 – Volga-Dnepr Ireland Ltd was established in 1996 for AN-124-100 maintenance; 2000 – The US branch was established to promote Volga-Dnepr services in the North and South American markets. It deals with Volga-Dnepr marketing and sales in the region. The branch is situated in Houston, Texas. At present Volga-Dnepr - Unique Air Cargo Inc. generates about 30% of Volga-Dnepr’s total global operations; 2004 – Ruslan SALIS GmbH was established in 2004 in Leipzig by its joint founder partners, Volga-Dnepr Group (Russia) and Antonov Design Bureau (Ukraine). The company won an international tender for air transportation support to anti-terrorist, peacekeeping and humanitarian operations. |
Industry/ business area |
Full range of air logistics solutions using both chartered and scheduled transportation. |
Entry mode |
Greenfield, FDI (creation of representatives offices, the Engineering and Logistic Centre, etc), joint ventures (Ex. Ruslan International Ltd, Ruslan Salis Gmbh) |
Motives |
Other general motives were the “pull” ones, i.e. growth opportunities: · To increase sales · To increase market share of the firm |
Firm specific advantages used on the foreign market |
Leadership strategy, future concern, high professionalism, client orientation, financial stability and transparency, safety and leadership as the core business idea of the Group, fulfillment of all international safety requirements and standards. |
First mover or follower |
First mover in the segment of non-standard (oversize and heavy) cargo transportation.
Volga-Dnepr Airlines operates chartered freight services within the Group. Established in 1990 in Ulyanovsk, it was the first private airfreight company in Russia with a unique business model of providing commercial operations using An-124-100 “Ruslan” freighters to provide previously impossible air logistics solutions. By introducing Ruslan freighters into the civil (non-military) market, Volga-Dnepr Airlines established a new international market segment for non-standard (oversize and heavy) cargo transportation. Nowadays, Volga-Dnepr Airlines is the world leader in this field and the largest operator of An-124 aircraft. |
Type of state involvement in the process of internationalization |
The business of the Group has a strategic importance for Russia, as Volga-Dnepr has initiated a number of large-scale projects which are important for the development of the Russian aviation industry and transportation system. The major projects include modernization of the IL-76 cargo aircraft, recommencing serial production of the AN-124 “Ruslan” freighter aircraft, and the development of a cargo hub at Sheremetyevo Airport, the first of its kind in Russia. So, Russian government has tried to help the company to internationalize and was interested in this internationalization. For example, in 2003, according to the Decree by the Russian Government, Volga-Dnepr became designated air carrier between the USA and Russia, China and Russia. |
Evaluation of the success of the internationalization |
Successful. The Group is a world leader in the global market for the movement of oversize, unique and heavy air cargo. Volga-Dnepr Airlines’ client list includes many of the world’s largest industrial corporations such as Lockheed Martin, The Boeing Company, Airbus, Alcatel, Astrium, Bombardier, British Petroleum, Exxon Mobil, British Aerospace, General Electric, Bedford Group, Ericsson Air Crane, and Starsem. Volga-Dnepr Airlines is a member of the International Air Transport Association (IATA) and The International Air Cargo Association (TIACA). |