FLUG REVUE March 2003: Domodedovo airport modernizes

DOMODEDOVO AIMS FOR WESTERN STANDARDS

By Sebastian Steinke

A picture book winter in Moscow: the external temperature is -18ºC and the pallid December sun casts a golden tinge on the woods that line the express road to Domodedovo. So much for the old familiar Russia clichés, for the airport building which now emerges behind the tree tops no longer has anything in common with the former spartan Soviet airport for domestic routes to the Far East opened in 1964 or with the system-induced disinterest in service that once prevailed.

For "DME”, as it is known in the air transport industry, has been renovated down to the last tile and today comes over as a modern airport consistent with the lavish Western standards to which we have become accustomed. Not only is it the biggest cargo hub in the country, but in 2002 it achieved almost 70% passenger growth, while its rival Moscow airports of Sheremetyevo 1 and 2, Bukovo and Vnukovo were forced to contend with falling numbers.

Domodedovo's more recent success story began in 1995, when the private Russian air transport and logistics conglomerate, East Line Group, took over the airport from the government. Apart from the actual runways, which for legal reasons always have to be under direct state control in Russia, the East Line Group leased the entire site along with eight passenger handling and service areas for 75 years.

A comprehensive East Line service package from a single supplier, ranging from ground handling, refuelling, maintenance, cargo handling, hotel and catering through to airport operation, is expected to recoup the investment which the company has poured in to the venture. East Line sees its "handling from a single supplier” as offering the benefit of convenience to the customer. Altogether, Domodedovo has 9,500 direct East Line employees, while a further 5,500 are employed at the airport by outside companies.

The makeover of the airport began with a costly renovation process that culminated in redevelopment of the main building, which has just been completed. By the summer, the control tower will also have been renovated and two ground handling areas expanded towards the apron and equipped with additional passenger bridges.

The other Moscow airports had then better prepare for the freeze, if they have not already done so, as their rival Domodedovo, with charges about one-third lower and its unusually strong service orientation, will also be targeting western airlines, which in the Soviet era always had to choose Sheremetyevo 2 airport. Today all the Moscow airports are allowed to woo international customers. For example, Air Malta and Swiss already fly from DME.

"Moscow presently has about 21 million passengers a year, of whom one-third pass through Domodedovo,” explained Dimitri Kamenshchik, group chairman of the East Line Group, at a press conference in Moscow that FLUG REVUE attended. "We already handle over half the domestic traffic and over half the freight volume, plus one-quarter of Moscow's international passengers.”

Whereas in 2000, according to information provided by the airport, only a relatively modest 2.8 million passengers passed through DME, this rose to 3.9 million in 2001 and then shot up to 6.7 million in 2002. This year the number of passengers is expected to rise once again, to well over 8 million. Of course this meteoric growth is at the expense of the other Moscow airports, but Kamenshchik added, "My aim is to develop Domodedovo, not to close the other airports. That would be a matter for the government.”

The West-oriented CEO, who is still only 34, got to know "his” airport starting from the bottom. As a business sociology graduate of Moscow University, he started organising charter flights from Domodedovo to China for tourists on shopping trips in 1992. He later moved to the airport's cargo division before being appointed to the helm of the East Line Group.

Up to now, very little has been known in the West about this company, whose annual turnover, according to its own figures, comes to $1 billion a year. The few private owners of the parent FML Holding Inc., which is registered as an offshore company in the UK Isle of Man, prefer to stay in the background.

It is therefore all the more remarkable that the company is now wooing the Western public on its own initiative and in December for the first time invited trade journalists to a press conference in Moscow. This opening up of East Line is of course helping to market its newly created capacity in Domodedovo. But as an observer one could speculate that this is all part of a plan for a possible future stock-market flotation, which would be an obvious way of financing the massive growth capital expenditure that is planned for the future.

According to Kamenshchik, at present the East Line Group is financing the systematic, step-by-step expansion of Domodedovo, which is likely to swallow several hundred thousand dollars, itself, primarily from the profits from the Group's own airline, East Line AirLines. By its own figures this company, most of whose business is in cargo transportation, notched up a 250 percent growth in traffic in 2002. It has 29 planes of its own, and depending on the season, uses up to two dozen additional leased aircraft. However, the cargo flows to be transported are relatively one-sided, as most of Russia's imports are consumer goods and equipment which arrive by air, whereas its exports tend to be raw materials like gas and oil.

As far as services to Germany are concerned, freighters from Domodedovo fly daily to Leipzig, while the Sibir airline, which does not belong to the East Line Group, provides weekly passengers services between Domodedovo and Düsseldorf. At the last Berlin Air Show, no doubt many visitors noticed an East Line Il-76 parked in the static line.

Back to Moscow. The East Line air cargo centre newly built by a Turkish company has 12,720m² of floor space. This includes special areas for ad valorem freight, perishable goods and hazardous goods. Cargo manager Alexander Galetzki is especially proud of the high security classification – "six” – of the fully video-monitored facilities, in which even diplomatic post is handled. Even Russian banks only enjoy a "five”. There have never been any attempted robberies here.

A line of stocky Il-76 widebody cargo planes, also known here as "jumbos”, is parked directly outside the building. The extensive apron extends as far as the two large maintenance hangers of the Aircraft Maintenance Base (AMB), which employs about 1,000. All the common Russian and Ukrainian aircraft types and their engines can be maintained and, if required, given a full overhaul here. The types most frequently seen at present are the Il-62 and Il-86. The new Tu-204 will shortly be joining their ranks. No fewer than 180 airlines have their aircraft maintained here. These include prominent customers like Gazpromavia, the well equipped transport service of the immensely rich raw materials company Gazprom, and even the government fleet used by President Putin.

At present two groups of 16 East Line engineers are undergoing training with Boeing to enable them in future to also maintain the products of the American manufacturer on site in a new hangar still to be built that will accommodate two widebodies. The FAA and JAA licensing processes regarding the maintenance of Boeing types are under way. Efforts are also in hand to create a similar co-operative agreement with Airbus.

But what is most striking at Domodedovo is the modern range of service offerings available in the passenger terminal, or rather in front of it. For Domodedovo is the only Moscow airport to have a direct railway connection. Particularly comfortable commuter trains offering an on-board video service carry passengers to the airport terminal in 40 minutes for a $2 fare from a separate area in Moscow's Paveletski main-line station. At present these run once an hour but from April frequency will be stepped up to every half hour. Given the unpredictable Moscow road traffic, this benefit is not to be underestimated. By comparison, the car journey to the airport sometimes takes over an hour despite a special motorway link. Domestic passengers and, since the beginning of the year, international passengers as well, can check in their luggage at the station. This is possible thanks to East Line's own fibre optic cable which links up the reservation computers at station and airport.

Arrival in Domodedovo. Whether one comes from the bus station, the car park (which costs $15 for two weeks) or the railway station, the check-in "islands” at which the passengers can offload their luggage before the actual check-in begins are easy to locate. Every passenger can choose which counter to go to. Thanks to a specially developed East Line computer programme which has replaced three ancient Russian reservation systems, processing time per person is 30 seconds or less. All baggage checked in is x-rayed. A dedicated security department equipped with explosive sniffer dogs, video cameras, x-ray equipment and electronic explosive detection devices monitors every area of the airport.

Having got rid of their baggage, passengers arrive unencumbered in the waiting area on the first floor, where one can enjoy a view of the apron from a leather seat or visit one of several retail outlets, such as an espresso bar. There is even a lounge for small children and their parents available free-of-charge. This is generally generously furnished with cots, a play area, showers and cooking facilities, and even boasts the services of a baby nurse. But the airport administrators have also thought of adults with special needs and built the first Russian Orthodox chapel at an airport. An Islamic prayer room is to be added, as many Asian Russians are of the Muslim faith.

New flat panel information displays keep passengers briefed of forthcoming flight movements and departure gates. The aim is that there should be an even split between domestic and international passengers in Domodedovo, and they all receive a high standard of service, making a significant contrast with the old Soviet times. CEO Kamenshchik comments on this point, "We must maintain our high standard irrespective of whether a customer comes from Siberia, Yakutiya or is a BA passenger from London.”

However, some of Kamenshchik's innovations have only hesitantly been taken up by Russian domestic passengers and airlines, who are not exactly used to comfort. Thus the passenger bridges previously only seldom seen in Russia were initially ignored by many sceptical Russian airlines. Despite the fees being no higher, it took six months or so before they began to switch from the draughty steps to this much more comfortable alternative. Ultra-modern, satellite-monitored low-floor passenger buses are used to transport passengers to remote parking stands. East Line is currently trying to tempt Russian passengers to use the internet by providing free-of-charge computers, initially in the comfortable VIP check-in area and the frequent flyer lounges on the ground floor but from the spring in the general passenger area as well.

For transit passengers needing to stay overnight, the nearby recently renovated Aerotel airport hotel, which also belongs to East Line, has 294 rooms and offers reliable middle-class comfort. En route to the hotel one passes the fully renovated centre for on-board catering, from which even Swiss has been ordering its meals since November. Up to 24,000 meals are freshly produced here every day for 47 airlines.

CEO Kamenshchik is not daunted by the prospect of huge numbers of passengers or of aircraft like the giant A380. "During the high season in August, we already handle between 10 and 15 Il-86's from Sibir per hour, each of them with 350 seats. Our airport facilities were originally designed for a strategic bomber base for the military, which was transformed into a civilian airport shortly before it was due to open. That's why the runways are 3,500 and 3,800 metres long and 60 or 70 metres wide and all the taxiways are generously separated. This means that we are ready for the A380 already today.”

The runways, taxiways and the entire apron, with 80,000m² of concreted surface, is to be renovated over the next three years by the Yugoslav company Sivas for the sum of $120 million. The work also includes replacement of the underfloor refuelling system. Even at the height of the building work, sections of runway at least 2,000m long will remain operational to handle ongoing traffic. Both runways (at present cleared to a maximum CAT II) are then to be equipped to CAT IIIa with a new Thompson instrument landing system. Later this will be upgraded to CAT IIIb. Already in 2003, Kamenshchik expects DME to be the first Russian airport to be approved for independent parallel operation of the two runways.

The next item on the agenda is for the East Line Group to lure some new airline customers to Domodedovo. As well as airlines from western Europe, it is particularly targeting the rapidly growing longhaul routes to China, for which Domodedovo, as a distribution hub situated to the east of Europe, appears ideal. Again, as the entire Russian airspace is increasingly opening up to civil longhaul connections, for example between western Europe and Asia and between India and America, Domodedovo is attracting the attention of many companies.

Moscow traffic is growing at an annual rate of 10%, and CEO Kamenshchik is already drawing up plans through to 2040. "We won't grow 80% every year, but nevertheless we want to avoid the mistakes of our colleagues in building airports that were hemmed in so that there was a ceiling on how far they could expand with the market.” For this reason, as a precaution he has persuaded the local district governor to put a planning block on 65,000 hectares of land in the vicinity of the airport. Up to eight more runways handling up to 100 million passengers could at some future date be fitted in these presently wooded areas which are barred to noise-sensitive residents. However, he does concede that this vision will take many decades to be realised.

From page 90 of FLUG REVUE 3/2003

Last updated 15 February 2003

FLUG REVUE, Ubierstr. 83, 53173 Bonn, Germany