Aeroflot Gets In The Game

Yevgeny Shaposhnikov glowers at the color photographs mounted on a wall of his Moscow office. Gesturing at a display of Russian-built Tupelov, Ilyushin, and Antonov jets, the 54-year-old CEO of Aeroflot Russian International Airlines fumes: "What a nightmare!" Shaposhnikov doesn't think these planes are good enough for his airline, the biggest offspring of former Soviet state carrier Aeroflot. This fall, he infuriated Russian aircraft makers by ordering 10 new Boeing 737s. If he has his way, within the next few years more than half of Aeroflot's fleet of 100 planes will be Western-built or fitted with U.S. engines and electronics.

Sure enough, in the 14 months since Shaposhnikov took over the controls, Aeroflot has begun to look a lot more like a competitive global airline than it did in the days when it was known mostly for its sullen stewardesses, lax safety, and overcrowded planes. A onetime fighter pilot who rose to become Soviet Defense Minister under Mikhail Gorbachev, Shaposhnikov was named because the Russian government wanted a strong leader able to buck the ingrown aviation manufacturing lobby. Kremlin insiders also installed a new management team that is now sprucing up service, dumping unprofitable routes, and expanding into new markets. If Shaposhnikov can continue such improvements while reining in costs, Aeroflot is well-positioned to cash in on a growing market for foreign travel. But it faces plenty of challenges, from foreign rivals to rising fuel costs.