- •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
Aeroflot
State influence: via ownership or other type? If ownership, please identify the share (calculate if the ownership is indirect) and name the public authority. If other type, please describe.
Aeroflot is Russia’s de facto National carrier and largest Airline. It was founded on March 17, 1923, and it is among the world’s oldest airlines and one of Russia’s most recognized brands8.
Following the dissolution of the USSR, the carrier has been transformed from a state-run enterprise into a semi-privatised company which ranks amongst the most profitable in the world. The government has had up to 51 % of shares and, thus, is able to control the decisions of the company and its strategy. Moreover, state “backs-up” the company, provides funds if they are needed, etc. The company, however, is not under complete control of the government, because, first of all, it serves a lot of international customers, and, secondly, is subject to international agreements such as Skyteam.
Internationalization:
Country |
In April 2006, Aeroflot became a full member of SkyTeam9, the second-largest airline alliance in the world. Since 2011 also a member of Sky Team Cargo. Through its combined vast network, SkyTeam provides service to 1,000 destinations in 187 countries. Aeroflot operates code-sharing agreements* with 30 Russian and around foreign airline companies. Aeroflot currently has about 200 interline agreements** with Russian and foreign airlines. * A code-sharing agreement is an agreement between two or more air carriers, whereby the carrier operating a given flight allows one or more other carriers to market this flight and issue tickets for it as if they were operating the flight themselves ** An interline agreement is a form of mutual acceptance of travel documentation. |
Year of entry |
In 1956 the first international flight of Aeroflot took place. In 1976 Aeroflot carried its 100 millionth passenger. Its flights were mainly concentrated around the Soviet Union, but the airline also had an international network covering five continents: North and South America, Europe, Africa and Asia. The network included countries such as the United States, Canada, United Kingdom, Spain, Cuba, Mexico and the People's Republic of China. Since the 1970s some transatlantic flights were flown using Shannon Airport in Ireland as an intermediate stop, as it was the westernmost non-NATO airport in Europe. On 14 April 2006 Aeroflot became the first air carrier in the former Soviet Union to join a global alliance, SkyTeam. It registered the Aeroflot-Cargo trademark in 2006. |
Industry/ business area |
Domestic and international passenger and freight services. |
Entry mode |
Cooperation via agreements with special air space agencies, other airline companies |
Motives |
Airline is almost always born to be global, it should be present in many markets. In addition, as Russia’s de facto national carrier it has to serve all the major world capitals. |
Firm specific advantages used on the foreign market |
Large fleet, highly specialized labor, best pilots, strong brand, extensive network of code-sharing agreements |
First mover or follower |
It is the first mover. It was the first Russian airline company to go abroad, and it is the first air company to enter into the international air alliance. Aeroflot was the first Russian airline company to join the International Air Transport Association (IATA) in 1989. |
Type of state involvement in the process of internationalization |
The Russian Government owns 51 per cent of Aeroflot. Legal entities and individuals own the remaining 49 per cent stake. In February 2010, the Russian government announced that all regional airlines owned by the state through the holding company Rostechnologii would be consolidated with the national carrier Aeroflot in order to increase the airlines' financial viability, that also helped Aeroflot to become even more attractive in the eyes of foreign partners. Russian government provides also some subsidies to Aeroflot. |
Evaluation of the success of the internationalization |
Very successful. Aeroflot - winner of the "Absolute brand - 2012" for the most expensive aviabrend worth over a billion dollars. Aeroflot brand - one of the most famous, not only in Russia but also abroad, and is in the top 20 most valuable brands in the world's airlines. |