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The founder and CEO of Avolus, Alexis Grabar, will talk about the outgoing year for the company, work in Russia, and share his plans for the future.
Mr. Grabar, 2011 is not an easy year for world aviation. The business aviation segment was no exception. How has this year been for Avolus as a whole?
2011 was a good year, but not the easiest year for Avolus. We end this year with 10% growth, up from 43% last year. The economic climate and competitive environment are still the constraints to growth in the industry. Over the past year, we have paid close attention to the quality of our services. Consistent quality, personalized customer service, attention to detail and commitment to tradition are the hallmarks of Avolus. Recently, we have received a lot of requests for long-term contracts, so we are pleased to present our new Jet Card Europe program – 25 block hours package. This program is the next step in the strategic development of Avolus, and we look forward to further growth of the business over the next 5 years. Although this program is mostly focused on Europe, we will also include such destinations as Moscow and St. Petersburg.
How much, in your opinion, has the situation on the Russian market changed, is it a priority for Avolus, and has it become easier to work on it?
Since 2004, Russia and the CIS countries have been key destinations for Avolus. Having lived and worked in Russia (with Eurocopter and Airbus), as well as having Russian roots, I have very close ties with this region. Today the Russian market is one of the most competitive markets with a huge number of players, ranging from a “single” broker to large players, including operators. This creates many difficulties for us, not only in providing competitive prices, but also in ensuring a high standard of quality in our offerings.
As the first international accredited broker for Russia / CIS, we work closely with RUBAA to ensure fair competition in the market so that our clients only fly aircraft that have a valid AOC certification. We offer our clients transportation services that meet the highest international safety standards in terms of aircraft maintenance and crew training. This is also important in insurance matters.
Russia remains a key region for our strategic growth over the next 5 years and we will continue to develop relationships with our customers, partners and suppliers to achieve our goals.
In the face of the new threat of the global financial crisis, Avolus is one of the few companies actively modernizing its fleet. What, in your opinion, is this connected with?
As a company that has been on the market for a long time, we have vast experience in acquiring a wide range of aircraft. Our strong relationships with the best operators in the region allow us to offer our customers the best aircraft. We constantly monitor the appearance of new aircraft on the market. We pay special attention to ensuring that our clients have access to the best aircraft at competitive prices.
Mr. Grabar, please tell us more about the company's work in Russia. Are there any special offers for Russian clients in order to increase their competitiveness in this market? Do you plan to open a Moscow office?
Our Russian clients attach particular importance to high standards of in-flight service and VIP meals. Our partners include Novikov Catering, thanks to which our clients have the opportunity to choose any cuisine for all flights from Moscow.
In addition, our new Jet Card Europe program also allows customers to purchase block hours at a flat rate of 25 hours or more. The program covers the continental part of Europe and provides access to a range of special destinations, including Moscow and St. Petersburg. It is one of the most competitive programs in the industry and offers a truly flexible and transparent pricing model.
We've also recently added the empty leg service to our site, which allows real-time access to discounted flights on over 3,000 aircraft worldwide. This program allows customers to choose any discounted flights, from Moscow to Los Angeles and beyond.
We aim to grow our business with the launched card program in Russia and expect a high level of demand from our Russian clients. We plan to open a Moscow representative office in 2012 in order to support the demand for the card program.
Is it possible to find out your opinion about the competition in the Russian market. A number of the largest European operators of the business aviation segment are currently operating in Russia, with the help of which you remain one of the most successful foreign companies on the Russian market?
Our many years of experience of presence and activity in the region means that today we are one of the five large brokers operating in the Russian market. The recent announcement of Avolus RUBAA as the first accredited international broker for Russia confirms our commitment to the development of private aviation in the region.
Since the founding of Avolus, the Russian business aviation market has been a key area for business development. 7 years later, Russia represents over 40% of our charter business and continues to be a strategic region for growth. The last few years have shown that the Russian market has become more competitive. However, we are committed to a long-term perspective of industry growth in the region and are pleased to work closely with RUBAA for the benefit of fair competition and good industry ethics. The very nature of our services means that safety is paramount. The use of reliable, certified and insured aircraft is an absolute must for the safety of passengers and our reputation.
We share the concerns of some of our main competitors about the increasing number of gray charters, but we believe that through our reputation, our customers, partners and suppliers can have absolute faith in what we offer. We see that regulatory collaboration with organizations such as RUBAA and local civil aviation authorities is essential to ensure the future development of the industry.
We believe that our main difference from competitors lies not only in our commitment to security and privacy, but also in a personal approach to each client, providing a personal manager available 24/7 to ensure the most comfortable and safe travel around the world with a touch of luxury.
Please rate the airport infrastructure of Russian airports. What, in your opinion, really prevents the company from strengthening its presence in the Russian market?
We are closely following the development of airport infrastructure for business aviation in Russia and welcome increased competition between Moscow airports (Vnukovo-3, Sheremetyevo and Domodedovo) and regional airports, in particular, with such as Pulkovo, airports in the cities of Sochi and Krasnoyarsk. We believe that, as in the UK (Farnborough and Biggin Hill airports) and Continental Europe (Le Bourget, Nice and Geneva airports), the quality of ground services is key to the development of private aviation.
What do you expect from 2012, please share your forecasts?
Despite the fact that the overall industry indicators, according to the EBAA, indicate an increase of only 3.5% in 2011 compared to 2010, we are already seeing a 10% increase in activity. This indicator, as well as the launched new programs and the consolidation of the management and sales of aircraft, allow us to expect an expansion of our business up to 30% in 2012.
We have also formed several strategic alliances, most notably with Jets.com in the US and with the ASA group in Asia, which have opened up new markets for the company. We remain very serious about opening a regional office with a local team, which will be key to delivering the growth we envision for 2012.
We are also in the final stages of completing the buyout of the controlling stake in the company, creating a new board of directors and obtaining additional investments for expansion, together with the consolidation of the entire Avolus team.
According to industry analysis, up to 50 new aircraft will be delivered to Russia and the CIS over the next 12 months. We believe Avolus Sales and Management will play a key role in this campaign.
Mr. Grabar, thank you for your interesting interview and sincerely wish you good luck in the Russian market.
PS . Today 23% of Avolus Ltd shares are owned by the founder and CEO of Alexis Grabar , while 77% remain owned by DP Holding , Investment Fund of a Eastern Europe Family office .
The company's management consists of the founder and CEO Alexis Grabar , the company's vice president for finance Simon Teakle , Chief Advisor to CEO Richard Thomas , Vice President UK / US Sales and Russia / CIS James Foster , Vice President Aircraft Sales & Management Alex Hunter and Neil Backhouse Senior Manager EMEA and AVOLUS European Jet Card programs. Richard Thomas was appointed Chief Adviser to the General Director : the advisor has been working with NetJets Europe , Jet Republic and Bombardier Flexjet , as well as colossal experience of doing business in Europe, Russia and the USA.
Avolus ltd limited is currently involved in the buyout of a controlling stake in the company by its founder and CEO Alexis Grabar , this procedure should be completed by January 2012. The new owners of the company's shares will be the management and CEO of Avolus – 1/3, the other 1/3 will belong to the private investment company James Caan ( the BBC Dragon ' s Den ) and another 1/3 will be a strategic investor.
