How has the Ukraine crisis impacted your business?
We had heavy hit on passenger demands both in and out of Ukraine, as well as transit traffic via Ukraine. We had huge impact of devaluation of Ukrainian national currency (Hryvnia). We have significant impact of costs overflying or bypassing the areas of military conflicts, and, unfortunately, now also the Russian air space. We lost significant popular air travel markets of Crimea and Donbass in the east of Ukraine. We are enjoying a little positive benefit of low fuel prices.
What were the reactions of Ukraine International Airlines to the crisis?
We were reviewing our network according to the changes in demand. We reduced our fleet. We managed to arrange several wet lease contracts for summer period and placed aircraft where the markets still exist and are not subject to Ukrainian crisis. We negotiated with a lot of leasing companies on early terminations and all other sorts of interactions. And that helped us to reduce fleet by 25% with a slight reduction of stuff.
We are also doing significant re-engineering of the processes and technologies within organization. And we managed to push down our unit costs. This work is in progress. We have very ambitious targets to be achieved in 2015.
Not being able to serve eight destinations within Russia, were you planning to open new destinations?
Regrettably, we actually cannot plan destinations within Russia. But we still have eastbound plans. Our most ambitious plan is to launch the Kiev – Beijing flight. We also have a few destinations close to Ukraine, like Riga, Minsk and a couple of Middle East points. In our hard work to increase utilization of our fleet we are going to launch non-stop services from the regional points in Ukraine, which will be operated instead of aircraft staying on the ground between the flights.
In the long-term view, how have your goals and plans changed (network, destinations, fleet, new markets etc.)?
They haven`t changed in the long-term view, except most of our plans are postponed, shifted further to the future, waiting for, hopefully, positive resolution of the current Ukrainian crisis, stabilization of the situation. And then we will reschedule all our plans. So they don’t change in principle, they only change in time.
Your 767 are getting older. Could you tell us something about the selection process?
Yes, we have passed through the selection process between two basic competitors of 767 – it’s B777 and A330. We made our choice. But all these plans are now postponed.
Looking at the trend of Premium Economy, can we expect UIA to implement that as well to their new aircraft?
Yes, I think that the concept of Premium Economy – something between Economy and Business Class service – was positively received by customers, had shown good results for the airlines. So, of course, on the long-haul routes this concept will be extended.
