Stakeholder Value Creation through Business Restructuring: Post Sanctions Evidence from Russian Airlines

Aleksandr  Stepanov; Alexander  Kayatkin

doi:10.17323/j.jcfr.2073-0438.17.4.2023.59-77

Aleksandr Stepanov LLC "RUSNANO Management Company", Moscow, Russia https://orcid.org/0009-0009-0758-580X
Alexander Kayatkin CJSC "EMIS", Moscow, Russia https://orcid.org/0009-0005-7746-7121

DOI: https://doi.org/10.17323/j.jcfr.2073-0438.17.4.2023.59-77

Keywords: stakeholders, economic value added, interests harmonized index, sustainable growth index, sustainable growth matrix, turnaround strategies, Russian airlines

Abstract

The study is devoted to evaluating of turnaround strategies used by Russian airlines to overcome negative influence of 2022 crisis caused by sanctions pressure of West regulators in terms of ability to create value both for financial and non-financial stakeholders. To conduct a quantitative analysis of the effectiveness of turnaround strategies, evaluation methods based on traditional accounting indicators were used, as well as VBM indicators that take into account an opportunity cost. A qualitative analysis includes the estimation of management actions and decisions in terms of whether they violate interest of companies’ major stakeholders. The study was carried out on the basis of such indicators as: PBITD/CE, PBITD/TD, ROA,
Gross margin, EBITDA margin, Net Debt to EBITDA, EVA, Sustainable growth index and Interests harmonized index. As a result of the study, the features of turnaround strategies used by Russian airlines, namely PJSC Utair and LLC Pobeda were studied. The accounting ratios as well as the dynamic of economic profit were evaluated. The Growth sustainability matrix was constructed. The effectiveness of turnaround strategies in terms of value creation both for financial and non-financial stakeholders was assessed and the conclusions about prospects of companies’ further development were made. The above results can be taken into account in the development of more sustainable turnaround strategies by other companies faced with challenges.

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