A pool agreement against the monopoly

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   By the middle of October Aeroflot had decided on the number of seats reserved on flights to London for travel firms’ packages: now travel companies altogether can take 180 seats a week for the winter period. This is about 10% less than in 2004–2005 season. Curiously enough, there are only two companies who became air carrier’s partners: BSI Group and VIP Service, compared to the previous year when there were two more players: British company Jerome and Great rivers. Margarita Davlikanova, deputy director general of Inna Tour company (this company is known to closely cooperate with VIP Service) commented on the issue: ‘The carrier forwarded a condition: it will reserve seats only for those with large scale volumes, the rest of the seats will be sold at retail.’ Yet, experts believe there is another reason: large air companies find it easier to work with a limited circle of customers rather than with many.
   Observes are intrigued by another central issue: how will seats be divided between the two package-buyers? They fear that the reduction of tourist players, who have direct contacts with the national air carrier, will tip the balance of power on the market of tours to Great Britain. There is a chance that BSI and Inna will gain considerable control over Aeroflot’s flights and therefore will be able to dictate the prices.
   According to experts, the turning point in the situation will be the behavior of other companies on the market. A BANKO journalist received such a forecast: “…there is an old power struggle for dominant position on the market between Inna Tour and BSI. Now it is BSI who has a better chance. Therefore, small companies intend to support Inna Tour by buying seats from it and creating a pool agreement with Inna to confront BSI.’ Denis Bashkirov, commercial director of Great Rivers, agrees with this position. He believes that the pool formation by players can prevent the monopolization of the direction. Observers name Great Rivers as well as Emerald Travel and Meridian Express amongst the participants of the pool.
   In turn, BSI does not doubt its success. According to Andrey Ignatiev, the head of directors board, the pool formation is a curious step: ‘There will not be a monopoly. However, if they are afraid of it, they can get together. I value strong competitors.’ He told BANKO that the previous year BSI had already tried to offer the common price for tickets to London, but ‘numerous small companies’ who bought a lot of seats from Aeroflot were against it. ‘However now, when there is only Inna apart from BSI, we can agree on a compromise,’ he commented to BANKO.