By Vovick Karnozov
AWN Moscow-based columnist

Reconstruction of the main air terminal in Domodedovo airport of Moscow is nearing completion. The $90 million project was initiated a year ago by the private sector East Line Group, which acquired control over the airport during its denationalization campaign two years ago.

The bulk of the reconstruction work is done by the Sivos company of Yugoslavia together with a number of Russian building companies. The airport will be fully open in June with completion of the international flight sector, while the domestic flight sectors will begin to function in full strength in March.

After reconstruction, Domodedovo will be the most modern Russian airport, fully corresponding to West European standards. This poses a big challenge to Sheremetievo, which for dozens of years has been the only Moscow airport serving flights of major Western airlines to the Russian capital. However, since the Sheremetievo-2 terminal was completed in 1980 (when it was the best one in all of the Communist world) it has seen only cosmetic changes and by now can hardly be rendered as a modern air terminal. The major cause to such a situation has been the lack of competition: the three other Moscow airports (Vnukovo, Domodedovo and Bykovo) simply lacked money and even the very desire to erect the whole range of facilities required for high-class international services.

This situation changed after the Domodedovo denationalization, which ended with East Line Group becoming the only owner of it, and the holder of a 30-year lease agreement with the local authorities on the 1,200 hectares of land on which the airport is located. East Line Group was not new at the airport: in 1995-1997 it erected two cargo terminals with a capacity of 800 tons of cargo a day, for which it invested $25 million. These facilities have proved to be a good investment for the group. Now they serve the majority of imported cargoes coming by air from China, Turkey and Arab Emirates. East Line cargo terminals have been very popular with charter carriers for relatively low charges and also ease of customs procedures.

Domodedovo has seemingly won the competition for airlines specializing in cargo charters with Ramenskoye and Chkalovsk aerodromes (which either cease to offers such services or experienced a big drop in 1999). Sheremetievo has stood out of that competition, having its own client base of large foreign and indigenous carriers like Aeroflot. In 1999, Domodedovo served 60%-70% of all Chinese exports by air, while its share in all cargo traffic via the Moscow Air Knot (Sheremetievo, Dododedovo, Vnukovo and Bykovo airports) stood at 46%. In 1999 Domodedovo served 120,000 tons of cargo, 15% more than the previous year.

Having won the battle for cargo charters, East Line began to think of passenger airlines. The first practical step in that direction was a $13 million investment into Domodedovo's on-board food factory in 1999, which brought the facility to a quality new level, now offering the same quality of services than similar facilities in Sheremetievo. Then followed a $16 million investment into a major reconstruction of the hotel for air crews. The next step was foundation of East Line Handling company to provide the full spectrum of services to air crews at Domodedovo.

These three steps have helped East Line to attract a number of CIS airlines, which preferred Domodedovo to other Moscow airports. The most important victory was the move of Vnukovo Airlines, the largest passenger carrier on inner Russian routes, from Vnukovo airport to Domodedovo. According to Sergei Rudakov, director for airport programs with East Line Group, in 1999 the annual turnover of the airport was nearly $200 million. It served 4.2 million passengers which gives 27% of all passenger traffic via the Moscow Air Knot. Tin 1999 traffic via Dododedovo was up by 8.5%, on the background of 7% decline in that via the Moscow Air Knot.

As of this month, 120 airlines fly to Domodedovo, including 47 airlines offering scheduled services. Still, there are no Western airlines flying to the airport, this fact limiting Domodedovo's international flight activity to regular services to CIS republics and charter flights by Russian airlines to holiday resorts in Europe, Mediterranean and Middle East. The only exception is a scheduled service to Germany on East Line's own Yakovlev Yak-42 90-seat tri-jet.

Sergei Rudakov expects a radical change this year, with completion of the new international flights sector fully corresponding to Western standards. He says that the architecture of the sector, location of serving desks for passengers and, indeed, all items of airport equipment were provided by western companies, most notably from France and Holland. Rudakov expects a 20-30% rise in passenger traffic via the airport in 2000 as a direct result of the air terminal reconstruction. The bulk of the rise will come from CIS airlines, for their passengers began to value new services, such as non-stop trains to Domodedovo from Paveletsky terminal in Moscow city.

Talks are in progress with foreign airlines, including Lufthansa, SwissAir, Olympic, Sabena and British Airways. Except for the modern terminal, Dododedovo can offer better slots than Sheremetievo, because of less busy traffic and the existence of two independent runways able to serve even the Boeing 747. Domodedovo, however, is farther from the Moscow city, but East Line hopes to partly offset this disadvantage by improving the autobahn to Moscow to allow higher speeds and thus lesser time to the city by road.

Interestingly, East Line Group, which has its own airline, does not have plans to expand its passenger services in 2000. Dmitry Kamenshik, East Line Group chairman, told AeroWorldNet that cargo aviation remains a better field for investments, while passenger flights in the current Russian realities, especially flights inside the country, are usually unprofitable.

East Line Airlines, which runs a fleet of 50 airplanes, mostly Il-76 four-engine freighters, is already the largest Russian cargo carrier. It is responsible for nearly 50% cargo flights to China. Strategic plans call for opening overseas offices and scheduled services to India, Italy and US in addition to already impressive network to Asian countries. Flights to Europe will require quite an effort on upgrading the aging Il-76 which has difficulty in meeting the current requirements to noise, emission and avionics.

Dmitry Kamenshik told AeroWorldNet that East Line is in negotiations with Ilyushin on funding work on installation of the Perm Motors PS-90A engines on the Il-76, with simultaneous work on extending the airplane's fuselage. Three Il-76MF airframes featuring these design changes have been built and put to tests, but Ilyushin needs additional funding to complete certification. East Line is also interested in a special cargo version of the Il-96-300, known as the Il-96C (C for cargo), also powered by PS-90As and able to carry up to 70 t of freight.

The head of East Line Group, whose annual turnover exceeds $1 billion, thus answered the question on the financial matters pertaining to the Il-76MF and Il-96C projects: "Everything in aviation costs much. We are morally prepared to pay the price."