Gazpromneft-Aero (GPNA), a subsidiary of Russian oil giant Gazprom Neft, has offered aircraft fuelling and ‘into-wing’ fuel since 1st January 2008. Airside talks to Vladimir Egorov, CEO of GPNA about the last seven years and about future expansion
Q. GAZPROMNEFT-AERO IS A RELATIVE NEWCOMER TO THE AVIATION FUEL BUSINESS; WHAT WAS IT THAT ENCOURAGED YOU TO ENTER THIS BUSINESS AND HOW DID YOU GO ABOUT LAUNCHING YOURSELF IN THIS SECTOR?
A. In 2008, Gazpromneft approved a new long-term business development strategy, one that included the intention to spin off divisions engaged in selling certain types of oil products. These divisions became independent business entities, and Gazpromneft-Aero was one of them.
Gazpromneft-Aero, Gazpromneft’s aviation fuel subsidiary, is predominantly engaged in retail sales of aviation kerosene in Russia as well as internationally to Gazpromneft’s newer markets. Gazpromneft-Aero has become a leader in introducing international aviation fuel service standards in Russia.
Q. HAVE YOU QUICKLY GROWN IN THIS BUSINESS OVER THE PAST EIGHT YEARS? WHAT HAVE BEEN THE BIG CHALLENGES, AND WHERE HAVE YOU SEEN THE BIGGEST SUCCESSES?
A. Today, Gazpromneft-Aero is not only the leader in Russian aviation fuel retail sales but also the only subsidiary of a Russian vertically-integrated oil company to provide aircraft refuelling abroad in partnership with local fuel suppliers. The company provides fuel for Russian and international airlines at 210 airports in 61 countries.
Gazpromneft-Aero has developed a large network of own-brand refuelling complexes (39 in Russia, one in the Kyrgyz Republic). At Sheremetyevo International Airport, the company has built the only modern alternative refuelling complex in the Moscow Air Transportation Cluster. Over six and a half years, GPNA’s total investment into on-airport aviation fuelling infrastructure has amounted to approximately US$300 million (18.5 billion rubles).
Q. WHAT DO YOUR ACTIVITIES IN THE ON-AIRPORT FUEL BUSINESS CURRENTLY INVOLVE?
A. Over the first nine months of 2015, the company achieved some of the best results in the Russian aviation fuel market. By the end of the year (2015), we plan to achieve the same level of fuel sales as last year – around 2.7 million tons, which will enable us to increase our share of the retail market from 24% to 29%.
The company has expanded its network internationally by 10 airports. This has been achieved through developing partnerships with the leading suppliers of aviation fuel in local markets. The company’s core markets are Russia, Europe, Asia and the Asia Pacific region.
In Moscow and St Petersburg, Gazpromneft-Aero provides fuelling services to some of the world’s major air carriers – including Emirates, Lufthansa and Aeroflot. We are developing partnerships with international cargo airlines and leaders in the international aviation cargo market – such as with Lufthansa Cargo in Krasnoyarsk and Yangtze River Express in Novosibirsk. Altogether, the company partners with 75 international airlines in Russia.
Q. IT’S BEEN A TOUGH TIME FOR THE INDUSTRY AS A WHOLE, IN THE WAKE OF THE ECONOMIC SLUMP OF 2008; HAVE YOU LEARNT A LOT FROM MANAGING TO SURVIVE AND PROSPER IN SUCH CHALLENGING TIMES?
A. Between 2009 and 2014, the Russian air transportation market demonstrated strong growth – approximately 10% per year. Fuel consumption in Russia increased at a similar rate. Gazpromneft-Aero became a leader in terms of ‘into-wing’ refuelling volumes by using cutting-edge equipment and introducing international standards for aviation fuel services in Russia.
Q. HOW WOULD YOU ASSESS THE AIRPORT FUELLING MARKET RIGHT NOW?
A. The global aviation fuel market is generally stable. According to information provided by Russia’s Federal Air Transport Agency, in the first half of 2015, retail consumption of aviation fuel decreased by 11%. Gazpromneft-Aero is open to diversifying its business in order to maintain steady aviation fuel sales. For example, in 2016, Gazpromneft-Aero plans to become the first company in Russia to sell B91/115 and avgas-100LL aviation fuel produced in Russia.
Q. CAN YOU TELL ME A LITTLE BIT ABOUT YOUR PARTNERSHIP WITH IATA?
A. Gazpromneft-Aero has been the strategic partner of the International Air Transport Association (IATA) in the field of aviation fuel supply since 2008. Today, all of Gazpromneft-Aero’s refuelling complexes at international airports have the high operational and environmental safety standards required by IATA. This allows GPNA to provide aircraft refuelling services without any restrictions, as this status is the necessary requirement for signing contracts with international air companies.
In co-operation with the IATA Fuel Quality Pool (IFQP), Gazpromneft-Aero also organises an annual international training course for aviation company specialists, aviation fuel suppliers, fuelling complexes and oil companies, which is the only one held in Eastern Europe today. The training is held in Novosibirsk, at the Tolmachevo airport fuelling premises owned by Gazpromneft-Aero Novosibirsk. The company is committed to being the leader in the introduction of international aviation fuel service standards in Russia. In collaboration with IATA, the company is also organising an aviation fuel forum in 2017 in St Petersburg, the first ever to be held in Russia.
Q. HAVE YOU GOT ANY PLANS FOR FURTHER EXPANSION OR IMPROVEMENT OF YOUR OFFERING?
A. The company’s strategic plans covering the period out to 2025 include the expansion of its own brand distribution network to 240 airports worldwide. Gazpromneft-Aero aims to maintain a leading position in fuel retail sales in Russia, and plans to increase sales volumes to 4.4 million tons. By 2025, the company’s planned investments will amount to more than $110 million (7 billion rubles).
With our focus on protecting the environment, the company employs refuelling equipment that minimises oil vapour emissions into the environment.
Regarding expanding our product offering, we are not currently considering developing a fundamentally new type of aviation fuel, as we do not see any demand for this. All our customers use the certified and well-known TС-1 and Jet-A1 fuels. The ‘Technical Policy of Gazpromneft-Aero’ describes all of the processes and meets all requirements of international IATA aviation fuel supply.
Modern refuelling complexes are fully automated and most processes of receiving, filtering, storage and transportation of oil products at a fuel and lubricant storage site are controlled remotely from a control centre. We also expect to start exporting TC-1 fuel to new international markets. The fuel’s physical and chemical properties make it particularly suitable for China and Nordic countries.
