Aeroflot is set to intensify competition in the Asia-Russia-Europe air cargo market with the recent transformation of its cargo division into a separate company, the upgrading of its freighter fleet and intentions to expand its cargo market share in China and other Asian countries.

With rival Russian airline AirBridge Cargo, part of the Volga-Dnepr group, also continuing to expand, such developments suggest there is going to be increasingly intense competition between the two carriers for Asian cargo, particularly out of China, being flown to Europe via Russia.

However, Alexander Kopkov, air cargo manager in Shanghai for ATC Air Service, a Hong Kong-based forwarder which charters and promotes Aeroflot freighter/bellyhold cargo capacity out of China, played down the suggestion that the market would become purely a head-to-head battle between the two Russian airlines.

"I would not focus on just one competitor. China Eastern, for example, has flights to Moscow and there are other players in the market. The situation is changing every day - we just work on what we can offer," he told Cargonews Asia during a recent visit to Aeroflot's European freighter hub at Frankfurt-Hahn Airport, Germany.

Kopkov said ATC would most likely see additional Aeroflot capacity out of Shanghai. "We think there is still great potential for further growth in China air cargo traffic," he added.

Kopkov was visiting Frankfurt-Hahn to take part in an international conference organised by Aeroflot Cargo to outline its business development plans for the next couple of years.

The first of those plans, revealed the carrier, involved the establishment of Aeroflot Cargo as a company rather than just a division of the parent airline.

"Today is the starting day of a new company, Aeroflot Cargo. This is a very important development in our history," announced Aeroflot's deputy general director network and cargo, Igor Desyatnichenko.

Cargo department director Andrei Goryashko said the new Aeroflot Cargo company would be 100 percent owned by Aeroflot and operate freighters and market bellyhold cargo space on Aeroflot's passenger fleet, which include wide-bodied B767 and Ilyushin IL-96 aircraft.

"The main purpose behind separating the cargo business out of Aeroflot is to improve the financial results," he added.

Aeroflot is also finally going ahead with long-standing plans to modernise its international freighter fleet by replacing current DC10-40F equipment with MD11Fs over the next couple of years. The former has a cargo capacity of around 60 tonnes and the latter 80-85 tonnes. The airline intends to add a further two DC10-40Fs to its current fleet of four by the end of this year.

Goryashko said Aeroflot had signed an agreement with Boeing Capital Corporation for six MD11Fs. The first of those aircraft was scheduled for delivery in the second quarter of 2007, he said, with the others following in series through to mid-2008.

The MD11Fs would replace the DC10-40Fs on international routes, he added, with the latter probably being redeployed on Russian domestic operations.

Currently, Aeroflot uses its DC10-40Fs to operate regular services to Europe, via Russia, out of five Asian cities - Shanghai, Beijing, Hong Kong, Seoul and Tokyo. According to Goryashko, the airline is planning to expand its market share in all those sectors although he did not elaborate.

Goryashko said Aeroflot also intended to expand its fleet of smaller Tupolev 204 freighters. It was already operating one of the new 27-tonne capacity aircraft under a code share with another airline, he said, and planned to add two more in 2007 and another one in 2008 to make a total of four.

Last year, Aeroflot carried 142,000 tonnes of cargo, about the same as in 2004. Some 80 percent of that traffic was international, primarily on Europe-Russia and Asia-Russia routes.