Wanted: A Really Big Airline

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MOSCOW: It may only have 14 airplanes, but that hasn’t stopped a small, privately-held Russian airline called Transaero from launching an ambitious bid for control of financially-hobbled TWA, the seventh-largest U.S. carrier. Transaero currently flies from Moscow to 30 destinations, including Los Angeles, Frankfurt and Tel Aviv. While frequently billed as Russia's top business success story, the Russian carrier's 1996 sales revenues were less than one-tenth the estimated $3 billion price tag for control of 51 percent of TWA. Transaero’s big gulp expansion strategy is in keeping with its flamboyant operating style. When it wanted to offer flights to popular European destinations such as London and Paris, it had the planes, but not the landing rights. Enter Riga Airlines, a Latvian carrier which had the landing rights, but not the planes. A partnership was born. Flying in Western planes, served by professional, well-trained staff, Transaero had no trouble selling seats, even though passengers had to make a stopover in sleepy Riga. The first Russian carrier to introduce frequent flyer cards, Transaero has embarked on a costly modernization of its crumbling Moscow hub with a view toward moving up to the first ranks of the industry. The airline’s management said today that if it can’t capture control of TWA, it will continue hunting for big prey. Look out, American.