We had a chat recently with
key executives at Ruslan International, which markets the
combined fleet of An-124s operated by Antonov Airlines and
Volga-Dnepr Airlines. They had some interesting points to
make about a variety of topics, from the world economy to
aviation fees in Iraq, and from the EU’s new emission
taxes to delivering aid to Sudan.
(for any readers not familiar with its dimensions) is basically
the largest beast in the commercial cargo aviation jungle—after
its big sister the AN-225, of course. The cargo compartment
of an An-124 measures 36.5m x 6.4m x 4.4m and the maximum
payload is a mighty 120,000 kg. It is similar to the American
military Lockheed C-5 Galaxy, but boasts a 25 percent larger
payload and can carry almost anything, from railway locomotives
to B777 engines.
Ruslan occupies an enviable
marketing position given that it manages 17 of the world’s
AN-124 planes, of which only around 25-27 are available
for commercial charter at any given time.
Over the last 12 months, commercial
non-defense contracts have accounted for around 40 percent
of the company’s total flights. With some parts of
Europe already back in recession, business development manager
Michael Goodisman said future demand was uncertain, but
he expected commercial work to increasingly displace defense
contracts, which are forecast to contract.
“Everyone is closely
watching developments,” he added. “We are seeing
fluctuating activity in the commercial market with a gradual
increase on average.”
He said the large fleet at
Ruslan’s disposal presents opportunities for international
connections, and the firm could also offer lower "one-way"
prices when scheduling allowed.
“In terms of yields,
these have remained fairly level. The charter rates themselves
are mainly driven by fuel prices, which are continually
updated in our costing system, so there will always be movements
One boon for Ruslan of recent
vintage was the ending of RUS Aviation’s monopoly
on collecting fees for flights to Iraq on behalf of Iraqi
Airways. A number of airlines and logistics companies had
complained that this was stifling trade, with fees of more
than $20,000 per flight imposed on cargo planes and cargo
uplift on passenger services restricted. An-124 operators
were being charged $100,000 per flight, regardless of payload.
2011, RUS Aviation lost their franchise, and was replaced
by a significant number of agencies approved to collect
royalties on behalf of Iraqi Airways,” explained Goodisman.
“The rates charged appear to be consistent among them,
at 25 US cents per kg for a single loaded sector within
Iraq and 37.5 US cents per kg for flights with multiple
loaded sectors within Iraq.
“The kilo rates are
based on the maximum payload of the aircraft type. So for
a An-124 which has 120,000 kg maximum payload, the charges
are 25 x 120,000, which equals $30,000 USD for a single
loaded sector and $45,000 for multiple loaded sectors.”
He said Ruslan was continuing
to perform commercial and defense flights to and from Iraq.
“We need about one week’s lead time to obtain
In the last year the strongest
commercial markets have been the supply of aviation spares
and helicopters, the power generation sector, satellite
delivery and the mining industry, especially in Australia.
The company has also performed
a number of Oil & Gas related flights into Africa, South
America—especially Brazil—and the Far East.
“New opportunities continue to emerge in the Oil &
Gas sector for An-124 project work as new discoveries are
made,” said Goodisman.
“For Thailand, we have
performed a number of flights carrying vehicle manufacturing
equipment, a sector which is expanding there.
“For Japan, following
the tsunami in March 2011, we initially flew pumps there
to assist with various flood relief work. This was followed
by a significant number of flights carrying power generation
equipment to assist following the de-activation of the damaged
nuclear power station.”
Ruslan also takes on humanitarian
work in Africa. “We flew a series of 15 flights carrying
equipment for the Japan UN peacekeepers in Southern Sudan,”
he said. “We landed in Entebbe, and the equipment
was sent by smaller aircraft and road into Southern Sudan.”
One of the biggest obstacles
facing all airlines is, of course, the EU’s highly
controversial Emissions Trading System. Paul Furlonger,
Ruslan sales director, said that while Ruslan supported
the aim of controlling carbon emissions with the intention
of reducing global warming, the unilateral imposition of
the EU ETS was not the best way of achieving that goal.
“The scheme is ill
conceived and ill thought through,” he added. “It
is essentially a license to print money for consultants
and commodity traders. It will impose a significant cost
on the industry which will inevitably be passed on to consumers.”
He said that although the
price of Carbon certificates would fluctuate, the system
inevitably ensured there would be a spike around the time
of the auctions. “Those with big pockets will be able
to use their financial clout to their advantage and the
corresponding disadvantage of smaller organizations.
“Airlines are obliged
to use consultants and independent auditors, never mind
all the additional man hours of internal work involved.
So in addition to the basic cost of the carbon certificates
there is the cost of the financial traders and the transactions
as well as the cost of the auditors and their audits, not
to mention the amendment of internal systems to allow for
the new element of cost and its inclusion in sales, purchasing,
and accounting systems.
“For every business
in the chain there is a required profit margin. So the overall
cost is far more than the cost of the certificates themselves.
“The variability of
the market price for certificates also makes it difficult
for airlines to plan because it adds another level of uncertain
cost to a business that is already working with the volatility
of fuel prices, which make up the largest single element
He argued that a simple tax
based on the distance travelled in EU airspace would be
fairer, cheaper, and simpler. “This would have been
easily calculated and levied based on the executed flight
plan and added to the navigation services bills issued by
“This would have favored
those who invest in emission reduction technology, would
not have required the additional layers of work and administration
and would not have left the field open for bankers and commodity
traders to make additional markets in certificates, derivatives,
etc, all of which serve only to make margins for financial
institutions and do nothing—either for carbon reduction
or for the cost of aviation.
“That kind of system
would be easily mirrored by other countries avoiding the
current inevitability of conflict between the EU system
and other systems that may be introduced by other countries.
It would have been simpler and quicker to introduce and
“Failing that, aviation
should have been allowed to go the same way as shipping
and introduce a system for carbon emission control and reduction
only on the basis of global agreement.”