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Aeroflot Makeover

Aeroflot - distancing itself from its Soviet-era image

Will Daley  Jun 23, 2010

OAO Aeroflot, Russia’s biggest airline, is retraining flight attendants, hiring stylists and updating its menu regularly to attract more passengers and distance itself from its Soviet-era image.

“Aeroflot still breeds this misconception which is rooted in the Soviet era when everyone thought that Aeroflot equals bad quality,” Chief Executive Officer Vitaly Savelyev said in an interview at Bloomberg headquarters in New York. “Now it’s a totally different company, and in terms of on-board service we are not a step behind world leaders in the segment.”

Aeroflot alternates its menu every four months and has offered items from oat and pumpernickel rolls to braised short ribs and smoked salmon. Last year, the company sent 50 flight attendants to Mil-Com Aerospace Group in Singapore for training. Eight of those cabin-crew members now serve as trainers for Aeroflot workers with the goal of instructing the entire staff of more than 2,000 attendants.

“It goes without saying that Asian companies, including Singapore Airlines, feature top service,” said Savelyev, 56. “We consider them to be a benchmark for our work.”

Boeing, Airbus Fleet

Aeroflot was founded in the 1920s and was the world’s largest airline during the Soviet era, flying only Soviet-built aircraft. The airline’s fleet today consists mostly of Boeing Co. and Airbus SAS aircraft. The Moscow-based company continues to fight a Western media image of surly flight attendants and ragged aircraft, analysts said.

Aeroflot, which tripled net income to $86 million last year, said last month that it carried 834,200 passengers in March, an increase of 38 percent from a year earlier. The load factor, or proportion of seats filled, rose 14.4 percentage points to 75 percent in the month, the carrier said.

Foreign customers choosing between Deutsche Lufthansa AG and Aeroflot would tend to choose Lufthansa, said Elena Sakhnova, an analyst with VTB Capital in Moscow. She considers the negative perception unfair.

“Aeroflot itself has very good quality of service,” said Sakhnova, who has a “buy” rating on the stock. “As a frequent-flier traveler, I can say that business class of Aeroflot to Europe is definitely the best in Europe.”

Food, Smiles

Service has improved substantially since the collapse of the Soviet Union almost 20 years ago, when cabin crews spoke few languages other than Russian, offered mediocre food and rarely smiled at passengers, said Alex Kazbegi, a Moscow-based analyst with Renaissance Capital Financial.

Kazbegi said he now prefers Aeroflot’s business class to British Airways Plc and Lufthansa.

“Business-class service and the seats in Aeroflot are much better, especially on the European routes,” he said.

Before training Aeroflot attendants, Mil-Com instructors flew as observers on Aeroflot routes, where they found a lack of communication between flight attendants and passengers, Savelyev said.

“They were not too attentive,” he said. “We are rectifying this.”

Aeroflot retained stylists to advise male and female attendants on grooming and appearance, Savelyev said. They offered tips on makeup, skin care and hairstyles, he said.

“This does cost a lot of money,” the CEO said. “But we do believe this investment will pay back.”

The average plane in Aeroflot’s fleet is three to four years old, Savelyev said. The company plans to implement cell- phone check-ins by the end of the year and has an automated telephone-response system that answers queries in several languages.

“A name is something that you inherit from your parents,” he said. “And we would like to make this name really bright.”

Aeroflot - distancing itself from its Soviet-era image
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Source: Bloomberg

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