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).

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).