- How are you doing, Roman?

- Not bad. So far as this troubled time permits. Discouragement is one of the deadly sins. Never give into it at any cost.

- You are suited up, as I can see.

- I’m about to have my eighth Zoom teleconference today, so I have to stick to the business dress code.

- Has the lockdown interfered with your business routine?

- You bet! In business, just like in journalism, by the way, a lot depends on personal contacts, understanding details, and the chance to actually hear your partner. On a tiny telephone or computer screen most nuances are lost. This does create problems, but it has to be tolerated.

Back in March we shifted our head office to teleworking so as not to jeopardize our families and our colleagues who are in the senior citizen category. I’ve been sticking to teleworking myself ever since.

- Everybody around is talking about the ideal storm. Aren’t you a sailor by any chance?

- I took up yachting in my youth. At a certain point, I was a member of the Synergy Yachting Team. In fact, it was Russia’s national team in the Trans-Pacific class – sea-going sports - sailing vessels 52 feet long. Our gang achieved some impressive results, I should say. We took home the European Cup and clinched second place twice in the Louis Vuitton World Series, which is actually a world championship. Valentin Zavadnikov was the backbone of our team. He is a former senator turned businessman and a big friend of mine.

- Where did you go out sailing on your voyages?

- Most of the competitions were in the Mediterranean, at some two dozen locations.

- What was the worst storm you’ve ever experienced?

- There was one, but it occurred not during an official race. In 1993, we wound up in a category nine storm on the Beaufort scale in the English Channel. Huge, steep waves and wind speeds of about 20 meters per second…

It was really frightening. You suddenly realize that a 17-meter long yacht is a twig in the raging sea. At certain moments, when you’re between two waves nothing could be seen at all. No ships next to you. No horizon. Nothing. In fact, you’re trapped in a canyon between walls of water ten to twelve meters high.

- Doesn’t sound like child’s play at all.

- One ship next to us sank. None of its crew were found.

- How long did your yacht bounce around like that?

- Three days. Until we pulled into Plymouth. Mind you, the port’s rescue service was very helpful. The navigation conditions were so bad that we would not have managed on our own.

- Is this ongoing ideal storm worse than your English Channel ordeal? What do you think?

- It’s different. The main distinction is that it will not be over in three days. In this respect, the current situation is far worse. According to the Russian mentality, a horrible end is better than endless horror. The odds are, we will have to live with all this for months and, quite possibly, years.

- What does all this stand for in your scheme of things? Remote work?

- I’m talking about the coronavirus, the need to get adapted to it, to rearrange our work, take care of the sick and at the same time do our utmost to prevent businesses from collapsing. It will not be over by May 1, or July 1. I suspect that a global victory over COVID-19 can be expected in 12-18 months from now. The pandemic’s aftereffects will make themselves felt for another two years, if not more.

- When did you realize that this was no joke? That this was going to be very serious?

- When the virus stopped being Wuhan’s problem or China’s dilemma and turned into a global headache. The mobility of the population is very high. Once the epidemic spilled over the boundaries of just one region, keeping it at bay became a rather tricky thing. At the end of February, we foresaw that this predicament was here to stay, and that it would take very much time.

- What steps did you take as a businessman?

- We revised our plans for all of our lines of business for this year. We began to stash cash to create a safety net. We slashed capital investment. It should be remembered that we invest and build a lot. Second, we issued teleworking instructions. There where it is not possible, we introduced a shift work strategy. In other words, we took precautions in advance.

We did our utmost… Aeon Corporation is present in four sectors: natural gas conversion, transport (Novaport is Russia’s largest airport holding company), real estate and the mining of precious metals – gold and silver. We drew up special procedures for each of these segments.

In the chemical industry, the key problem is nothing can be done through remote work. If you have an ammonia production unit to run, it has to be maintained in operation around the clock, with specialists keeping an eye on the technological parameters and safety. We have four continuous production cycle enterprises, where personnel had to be provided with individual kits for protection from the virus and all crucial instructions and regulations issued. Those four operations are Kemerovo’s Azot, the Angarsk Nitrogen Fertilizer Plant, the Meleuz Mineral Fertilizer Plant and Tatammoniy in Tatarstan.

As far as the transport segment is concerned, Novaport has offered considerable discounts to air carriers to let them fly as long as possible.

- How many airports do you have?

- Twenty. If air carriers go broke, the airports will become useless. Nobody will go there just for the sake of admiring the architecture of the terminals or enjoying the sight of grounded airplanes. We are extremely concerned about maintaining the stable operation of partner companies. We are aware that passenger flow is drying up. It has been down 90%.

In the air industry, everybody is having a hard time. Everybody is enduring mammoth losses. The reserves set aside for a rainy day during the previous season are shrinking. The industry’s operation is seasonally dependent. In the winter, air carriers service their current debts. Their main earnings are in the summer, when passenger traffic soars. This year, there will be no tourist season. The air carriers’ main problem is not staying afloat till the end of May. It is far more important how they are going to manage to carry on without ticket reservations and sales.

The tourist industry’s recovery may occur no earlier than May 2021. Swimming underwater ten meters is one thing. Holding your breath to go hundred meters is something totally different. The amount of oxygen in the lungs may not last that long. For the time being, the airlines are eating up their reserves accumulated during the previous season, and before long these funds will be used up. I believe that July will be critical. No cash will be left in bank accounts by then. You know, as far as I can remember, not a single air carrier has gone bankrupt due to large debts. Usually, they grind to a halt when there is no cash to pay for jet fuel. That’s when the real crash follows.

I am certain that this issue will emerge in July.

- Do you see any solution?

- Government guarantees that would let the air carriers and companies service their current loans. First, the government issues a guarantee. It is registered at the treasury. After that, it is possible to go to a commercial bank and ask for a loan at a normal rate, because in fact it is Russia’s sovereign risk. When an air carrier that has taken out a loan (and all of them have loans) goes to a bank and asks for more money, the first question will be: “May we take a look at your balance sheet? What is it that you have there?” It’s easy to guess what’s there. Firstly, the losses, and secondly, a shortage of its own capital. According to the Central Bank’s existing rules, commercial banks are unable to issue loans to companies within the high-risk group. The applicants will be asked to bow out.

The sole way of coping with this dire situation is to issue a government guarantee, thus ensuring the air carriers’ current balance sheets should not have to be scrutinized. Then it will be possible to borrow money to make wage and lease payments. The Federal Air Transport Agency Rosaviatsiya and the Transport Ministry support this.

Caps on loans are starting to be set. The approach must be transparent and honest. Say, the cap on a government guarantee may be 2,000 rubles ($27) per one passenger carried in 2019. For the airports it may be, say, 900 rubles ($12) per passenger serviced. This does not mean that all air carriers will get to take out government-secured loans, but they will be hypothetically available. If things go from bad to worse, it will be clear where to turn to in order to be rescued: there is a government guarantee available from the treasury and you are free to promptly convert it into cash. The guarantees must be issued for free for a period of three years, which will enable companies to make money and repay the loans to commercial banks. I should say right away that apparently some air carriers will be unable to fully repay these guarantees in three years’ time. Consequently, the company will have to be nationalized partially or completely, and eventually auctioned to compensate for the government’s expenses.

At this moment, guarantees to the air industry and big businesses are the most suitable form of government support. It does not require instant disbursement of funds and promotes a responsible approach. The money will have to be repaid anyway, but the business chains’ operating stability will get much stronger.

- Have you discussed this with the transport minister?

- We are discussing different ideas with Transport Minister Yevgeny Dietrich and Rosaviatsiya (Russia’s Federal Air Transport Agency) Chief Alexander Neradko. First Deputy Prime Minister Andrei Belousov is the one who has to tackle the ways of stabilizing the hardest-hit branches of the economy. The government keeps devising various mechanisms. No final solutions are available for now, because a large amount of preparatory work still needs to be done by the agencies concerned. The rules are to be determined as to which enterprises should be granted guarantees and in what amount.

It’s up to the industrial ministries to decide. The Ministry of Industry and Trade is to take care of industrial enterprises, and the Ministry of Transport, of transport organizations. And so on and so forth.

- The world has enough for everyone's need, but not enough for everyone's greed. Does lobbying intervene at a certain point?

- You know, any crisis is a situation where demand is way above supply. You need something right away, but this is precisely something you cannot find anywhere. It’s a matter of time.

Many aspects of life concerning both society and the state have been harmed, and this includes the civil service. It is unable to instantly adapt itself to these new, unforeseen realities. A large system has to reconfigure itself before it can start to generate the right decisions.

But, let me say once again, it is naive to expect that everything will start working without a glitch overnight.

- What I’m talking about is different. The Russian government has drawn up a preliminary list of vital companies, absolutely crucial, core enterprises. Magically, one large bookmaking company got in there. But is it absolutely essential for the country’s existence at this particular moment? What I am saying is the one who knows the ropes may suddenly be recognized as an invaluable national asset.

- Lobbyists are a major force in any country. As for bookmakers, they were eventually deleted from the list. But without lobbying for one’s business, without highlighting its problems it is impossible to let anyone know about them. Civil servants do not have the magic mind-reading gadget that Soviet science fiction author Kir Bulychyov invented for Alice (his teenage character from the series “Guest from the Future”). If something troubles you, then go ahead! Blurt it out. Don’t stay quiet.

True, the list of strategic enterprises still raises a number of questions, but it was declared that this was just the first try. The final version will be adjusted.

- Are you among the select few?

- Yes, but in a rather unusual way. The airport of Chelyabinsk and Kemerovo’s Azot are in the group, while the country’s main transit air hub – Tolmachyovo Airport in Novosibirsk - is absent for the time being.

- Did you file a request?

- That was unnecessary. The Ministry of Economic Development formed the list on its own. But let me once again repeat, it’s a tentative estimate. The list will be revised again and again.

In the Soviet Union, there was a system of ranking industrial and transportation enterprises according to their size and energy intensity. Everybody new that the position of a Class One industrial plant CEO was open only to those with a previous record of work as a deputy CEO at another enterprise within the same group, or as a successful CEO of a lower-category business.

There is no such system anymore, but something of the sort will have to be introduced again. Not in the sense of personnel appointments, but from the standpoint of the reasons for including the nation’s top companies in the list. I believe that it will take a month to finalize such a list and make it work. Also, Vladimir Putin has urged Russia’s regions to decide on their own what businesses and industries are considered strategic for them. This is the correct approach. Each republic and each region would know perfectly well what is important and what is not.