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Authors: Ben Brunson

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18 – The View

 

Masrov arrived at Vu’s Bar on the 51
st
floor of the Emirates Hotel Tower at 6:45 p.m. He told his driver that he would be anywhere from two to three hours. His late afternoon had been spent in another meeting, this time with an aviation attorney at the same firm of Heinrik Waddington. It was this specialty and this attorney that had caused Masrov to hire the firm in the first place. Forming companies was a commodity service, done online in the U.S. or Europe for about $100. But navigating the ins and outs of obtaining civil aviation authority was a specialty, one in which experience and connections were invaluable. Abraham Sanjoors was considered the best in the Gulf Region and Masrov was more than happy to pay his senior partner rate of $450 per hour for his advice. The meeting earlier in the day had been introductory, each man learning about the other. Sanjoors wanted to understand the goals and timing of Swiss-Arab Air Cargo and he wanted to set the Russian’s expectation on the amount of time and money required to obtain an Air Operator Certificate from the General Civil Aviation Authority of the government of the United Arab Emirates.

The Russian had reacted to the projected twelve
- to eighteen-month timeline with anger, insisting that in Russia, any attorney worth his money knew how to bring about an expedited review. Sanjoors was offended by the suggestion, threatening to quit. Masrov was about to walk out in disgust when the junior attorney in the room, the associate who worked for Sanjoors, suggested another way to get the desired outcome. The firm was representing a small air cargo company that he thought would entertain an offer from Swiss-Arab Air Cargo. They owned two small turbo-prop Antonov AN-32 transport aircraft and barely broke even. He suggested that Abraham Sanjoors call the owner the next day. Masrov asked the obvious question: Can the authority be transferred? Sanjoors answered that it couldn’t be transferred, but if Swiss-Arab purchased the stock of the company, it would control the authority and could change the name of the company.

The meeting ended on
that upbeat note, with Masrov already impatient to hear. He extracted a promise from Sanjoors to call him as soon as the discussion with the owner had occurred.

But now the Russian’s mind was occupied with other pursuits. The bartender at Vu’s brought him a bowl of mixed snacks along with his Crown and seven. Masrov took a sip, trying to figure out why sesame sticks were always mixed in with the peanuts in every bar. He motioned the bartender back to him. When the young Emirati came over, Masrov extended a folded $100 bill pressed between the forefinger and second finger of his right hand
. The bartender smiled broadly.

“Yes, sir. What can I do for you?” His English was quite good. It was the language most widely used a
t Vu’s – even more than Arabic.

“I am going to move to this table right here.” Masrov pointed to a table just a few feet
away. “I have a friend joining me and I want you to be very attentive.”

“Yes. Of course.”

“Excellent. Now I want you to get a bottle of Cristal Brut and keep it on ice behind the bar.” The Russian handed over the American banknote with Ben Franklin’s portrait on it.

“Yes, sir. It will be ready when you let me know.”

Masrov nodded his head. “Very good.” He stood up, lifting his glass and his small snack bowl to walk a few steps over to the table.

It was almost an hour before Kara Livingston walked up to the table. “You look lonely,” she said as she pulled out the chair to the left of Masrov. “Mind if I join you?”

He cocked his head to his right and waved his left hand toward the chair. “My pleasure.” He looked her over as she sat. She had changed from earlier in the afternoon and had correctly guessed that Masrov had not. She was now wearing a black cocktail dress. Masrov couldn’t quite decide if she looked better now or before, but he knew that either way, she was still very attractive to him.

“Can I get something for you?” he asked.

“Yes. My favorite drink here is called the Hibiscus.”

Masrov turned and signaled to the bartender with his right hand. The young Arab came over from behind the bar and the Russian ordered the drink, a specialty of the house. He turned back to her. “You look very beautiful.”

“Thank you. Mukhtar told me you are here to form a new airline.”

Masrov looked puzzled.

“Your new banker,” she said to prompt his memory.

“Ah, yes. Of course.” Masrov took a sip from his Crown and seven. “No, not an airline. An air cargo carrier.”

“Is that any different?”

“Yes, of course. We won’t carry any passengers, just cargo.”

“I understand that. I meant from a regulatory perspective.”

Masrov looked at her, mentally noting that she was
more inquisitive than he expected. “So you’re an airline attorney now?”

Kara shifted uncomfortably, not wanting to come across as too probing. She always wanted to make the right initial impression. “Well I’m a businesswoman. I find this stuff to be fascinating.”

The bartender walked up to the table with a glass filled to just under the rim with a reddish mix of tequila, hibiscus syrup, agave syrup and lime. Vu’s was known for not scrimping on the alcohol, very unlike most Dubai bars. But with a well compensated bartender, nothing would be spared. “Our world-famous Hibiscus for the lady.”

“Thank you,” said Kara. She took the glass and immediately raised it in salute to her date for the night. “Cheers.”

“Cheers,” replied Gennady. The pair clinked their glasses.

Kara took a sip. “Wow. That’s strong.”

“This is the first time I have had a drink in Dubai. I thought alcohol would be banned here.”

“Many people think that. But the Emiratis are really quite liberal and tolerant as Muslim nations go. As long as you don’t flaunt it. Alcohol is limited to bars like this that are associated with a hotel. Just don’t go out in public drunk and absolutely don’t drive – even after a single drink.”

“That’s more like what I thought.”

“Still, it is completely different than being in the Kingdom.” She was referring to Saudi Arabia.

“Aren’t there any extreme preachers here?”

“You mean Imams? There are certainly conservative Imams here, but really not much in the way of extremism. This is a wealthy country as you can see.”

“So is Saudi Arabia. But that is where bin Laden is from, along with most of al Qaeda.”

“Yes, but the Saudis let Wahhabi clerics preach freely before nine-eleven. They made a mistake.”

“A mistake that they aren’t making here?”

“That’s right.”

Masrov took a short sip before continuing. “How have they avoided it?”

“The Sheikh has spent freely.”

“Ah, but now you are in a circular argument.” Masrov smiled the type of smile that a chess master gives to a beaten opponent.

Livingston took a big gulp and swallowed. She leaned forward toward her date. “Is this how you do it in Russia?”

Masrov could not deny his Russian heritage. He slammed back the balance of his Crown and seven. “Nyet. That is how we do it in Moskva.”

Kara smiled and lowered her voice. “Okay, I will admit what you want to hear. The police are active here. The clerics who stray too far across the line get arrested. Keep pushing it and you will get deported.”

The Russian leaned forward, their heads now only a foot apart. “As a Russian, I understand the necessity of harsh measures.” He softly ran his left forefinger along Kara’s exposed right forearm. “Now we enjoy what we came here for.” He abruptly leaned back in his chair and turned toward his new friend behind the bar. The young man came over quickly and Masrov ordered his champagne. He turned back to the British expatriate and smiled.

“So how does a Russian wind up in Dubai starting an airline?” Livingston
asked.

“I go where my employer tells me.”

“And your employer is?”

“I never mention who my employer is. He does not like when the people who work for him talk about him.” Gennady shrugged his shoulders. “But I am always happy to admit that I am a big fan of the Chelsea Football Club.”

“You work for Roman Abramovich?” Her voice was excited.

“No, I did not say that. I just said I am a fan of Chelsea. I like Didier
Drogba.” Masrov gave his date a sly smile, making sure she understood his point.

Kara leaned back in her chair as the bartender approached the table. “In that case,” she said with a smile, “we are done. My side is Liverpool.” She laughed at her own joke.

“Excuse me, sir,” said the bartender as he presented the cold bottle of Cristal to Masrov. The Russian nodded his approval. The bartender opened the bottle, filled two crystal flutes and left with the bottle. He returned in seconds with a silver champagne bucket full of ice and the bottle of Cristal inside of it. “Anything else I can get for you, sir?”

“No.” Masrov raised his crystal flute and the pair clinked the flutes together, the sound created being the perfect ping that only fine crystal produces. “To new and lasting friendships.”

“Indeed,” responded Kara. She sipped the champagne.

The couple spent the next hour getting to know each other. During this time they added an appetizer of fried calamari to complement the bottle of Cristal. Masrov learned that Kara Livingston had moved to Dubai seven years earlier when her American husband, an investment banker she met and married in London, accepted a job to open a Dubai office for his firm. She loved life in Dubai, choosing to stay even after her husband left her for his young Indonesian secretary. Divorced for four years now, she had found her calling as a powerful businesswoman in a country in which the official ethics called for women to stay in the home. She relished the dichotomy. Every day that she closed another deal was another chance to flip her middle finger
at the male dominated society she opted to live in – and at the man who left her for a 28-year-old. Now she had risen to the pinnacle of the real estate brokerage business in Dubai. She was earning a lot of money and depended on no man.

Gennady Masrov poured out the last few drops into Kara’s flute. “You are a fascinating woman, Kara. Not at all what I expected to meet in the Middle East.”

“What did you expect?”

“Women in
burkas riding around on camels.”

Kara laughed out loud. “You are funny. Are all Russians like you?”

“No. Most are lousy lovers.”

Kara
stopped in the middle of a sip of champagne and lowered her flute. She looked at Gennady and shook her head. “You are trouble.”

“I try.”

“Let’s go to Boudoir.”

“Boudoir? What’s that?”

“It’s the hottest club in town. Do you dance?”

“I am flying out very early tomorrow morning. How about we go to Boudoir the next time I am back.”

Kara frowned with a pouty face, the alcohol in her system exaggerating her mood. “Oh, come on. You can give me an hour.”

Masrov knew exactly how the evening would end – if he wanted it to end that way. “I will take a rain check. But I promise you that we will have a great night next time.”

“Well, when is next time?”

“Not
positive. Probably next week. But let me drop you off at home.”

“You didn’t drive, did you?”

“No, Kara. I have the same driver I have had all day. The same car you saw when we left the office tower.”

Kara Livingston was drunk and now felt the regret of a silly alcohol induced mistake. “Oh, yeah. Of course. I remember.” She attempted a sip of champagne from her flute that only produced a solitary drop. She put the flute on the table for the final time. “I am honored to go home in your company.”

Forty minutes later, the Mercedes S600 pulled up in front of a garden home on Al Bumaan Street. This street formed a leaf of the famous Palm Jumeirah, the man-made palm-shaped island just off the coastline of Dubai. Masrov walked Kara to the door.

“Very nice home,”
Gennady observed.

“Thank you. I brought it last year after renting it for a couple of years. Great price. The only problem is that most of the homes here are vacant.” She put her key in the door and unlocked the deadbolt. “You should come in and see the beach. It’s right behind the house.”

Gennady Masrov reached across her front, firmly grasped her left arm above the elbow and spun her toward him. He leaned his head forward and softly kissed her. The pair lingered on the kiss, enjoying the feel of each other’s lips. Gennady pulled back after some seconds had passed. “Good night, Kara. I look forward to our next evening together.”

“Good night, Gennady. I am glad I met you.”

19 – Investing

 

Danny Stein stepped out of his office at 5 Bank of Israel Street in Jerusalem, turned left and walked across the building to the temporary office of Marc Leizman. Leizman had been recommended by the CEO of El Al after being asked by the prime minister for the name of a man with exceptional mechanical knowledge, great resourcefulness and enduring patriotism. Leizman had retired from El Al about a year earlier at the age of 62. After learning to be an aircraft mechanic in the IAF, he had spent 28 years at the airline, rising to head up all aircraft maintenance. It was said that there was not a plane that he couldn’t take apart and reassemble better than it was before.

Leizman’s
office was protected by a locked door that only Stein and the retired mechanic could open. Stein knocked first and then used his key to enter. “Good morning, Marc.”

Leizman was happy to have company. He was a mechanic by profession and even when he was part of the senior team at El Al he would relieve the stress of management by going to one of the hangers at Ben Gurion Airport and assisting a crew working on one of the many Boeing aircraft used by the airline. But in the two weeks since being called out of retirement by his prime minister, he had been doing nothing other than some online research and negotiating to buy a couple of planes. He knew he was on an important mission that was not to be discussed, but he did not know what it was – and he could not figure out why he was stuck in an office in Jerusalem in the building that housed the Ministr
y of Industry, Trade and Labor.

He had been set up in this office with two computers and two phones. He was instructed that one computer was for his internet searches and emails related to buying planes and engines. This computer was networked to the El Al system and his email address had been set up on the El Al exchange server. The other computer was for taking notes and any
planning or analysis. Likewise, one of the phones in his offices, which was clearly marked with red tape on the receiver, was a Voice over Internet Protocol, or VoIP, phone that was connected to El Al’s telephony network and used a number that came from El Al’s library of assigned phone numbers. Anyone tracking Leizman’s activities would find that all roads led to the El Al network. The other phone was an internal Ministry of Industry phone that had one purpose: allowing him to talk to Danny Stein when he needed to.

Leizman was told to restrict all personal calls to his cell phone. But there were not a lot of personal calls for Leizman. His wife had died of lung cancer half a decade earlier and his daughter, his only child, had moved to New York after marrying an American. Marc
Leizman’s life had been taking care of the El Al fleet and retirement had not turned out the way he expected. He had been spending all his days in his apartment in Rishon LeZiyyon just watching TV and sinking slowly and inexorably into a morose attitude that threatened to migrate into a full blown depression. His dreams of world travel had degenerated into a single trip to New York to spend a week with his daughter, son-in-law and his two grandchildren. But it was clear to him that he was not a welcome guest, his son-in-law being too busy and stressed to be able to handle another distraction.

He had been sinking lower when Danny Stein called him out of the blue a month earlier. Leizman was shocked when a member of the Kitchen Cabinet of Israel drove to
Rishon to have lunch with a retired man who lived alone and no longer seemed to matter to anybody. But Leizman immediately felt the excitement of being important again, the rush of having a purpose in life. Whatever it was that Stein wanted, Marc Leizman was fully on board.

“Morning.” Leizman motioned for Stein to take a seat
.

“How’s the progress?” Stein asked. He continued to stand.

“Good. I should finalize a deal for the second plane today. This one is located in Kazakhstan.”

“How much?”

“A little more than the first. This one will cost eight point three five million dollars.”

The higher price got Danny Stein excited. “PS-90 engines?”

“No, unfortunately. I still can’t find any 76s with the 90 engines. All of the ones with the 90s are just not for sale. Period.”

“Damn it.” Stein was deflated. The first assignment of Marc Leizman had been simple. He was to find two Ilyushin 76 cargo planes for sale and negotiate their purchase on behalf of a newly formed subsidiary of El Al with the name of Sun d’Or II, Ltd. The four engine Ilyushin 76 cargo plane had been introduced into the Soviet Air Force during the
1970s. The huge cargo plane had been designed to carry large military loads into and out of rough unimproved runways of questionable length. Over the decades, almost a thousand had been built and the plane was now being operated by militaries and civilian cargo airlines the world over. Many knew the plane by its NATO-given codename: the “Candid.” Finding planes for sale had been easy – as long as you were satisfied with the older engines that were not Chapter III compliant, meaning that they violated the noise abatement requirements of most of the world’s biggest commercial airports.

Leizman was looking for the Il-76TD model, the most widely used civilian version – and the most widely offered for sale. But all of the planes for sale had D-
30Kp engines, which were older technology engines. They were louder, generated less thrust and were less fuel efficient than modern jet engines. He had been hoping to find Il-76TDs with the new high-bypass technology turbofan engines made in Russia but utilizing many components from the West, known as the PS-90A2 engine.

“How do we get delivery?” asked Danny Stein.

“They will fly the planes here if we pay for airfares to return the crews.”

“Where is the first plane coming from?”

“Ukraine. Kiev to be exact.”

“No problem. When?” Danny Stein was inpatient. The money he needed to fund these purchases had taken much too long to obtain from the Ministry of Finance – the bureaucracy of the State of Israel being as frustrating as most governments.

“We close on the first plane tomorrow and they can fly the plane to Ben Gurion in a couple of days. If I get this deal finalized today, we should close next week and have the plane shortly after that.”

“Great job. Happy with the planes?”

“Very much so, other than the engines. Both planes still have about a third of the lifetime design hours left on the airframes. We got these planes at a decent price because we accepted obsolete engines.”

“You did great, Marc. How do we get the engines we need?”

“I talked to Aviadvigatel, the manufacturer. They are backordered for at least eighteen months. So I have been working some industry contacts I have.” Leizman paused and offered the hint of a smile. “I have a possible deal but it will cost us. A friend of mine owns a company in India that supplies the Indian Air Force with many of its engines, including retrofitting their engines. We used to trade parts all the time.” Leizman was giving Stein some “inside baseball” knowledge that left the minister uncomfortable. “The Indian Air Force is the largest buyer of PS-90 engines. I called him and got lucky. He is the next delivery from Aviadvigatel for sixteen PS-90A2 engines.” Leizman was very satisfied with his skills and his contacts.

“And? Can we get eight engines?”

“Yes, but we are going to fund his retirement in the process.”

“How much?”

“Maybe you want to sit down.”

“That bad?”

Leizman nodded. “Five point two-five million dollars per engine.”

“How much is the engine direct from the manufacturer?”

“For him, about four million per.”

“This guy is robbing us.”

“No, this guy is setting the price he needs to disappoint his biggest client, the Indian Air Force. My guess is that he will have to spread some of his profit around to his Air Force contacts to keep everyone contented.”

“We spent how much? Under seventeen million U.S. for the two planes, and for eight engines we will have to spend over forty million dollars?”

“Or I can keep looking. Or we can place an order and wait. Or I can look for refurbished engines. But if we want the A2 engines, they are just too young to be available other than new from the factory. You tell me what you want.”

Stein exhaled. “We need the engines. Go ahead.”

“It could be worse. If we were buying new GE or Pratt & Whitney engines, they cost more.”

“Well, that raises another question. Are these engines good? Should we buy American engines or Rolls Royce engines?”

“These engines are very good. They are modern and the critical components come from the U.S. and Germany. More importantly, the conversion kits to mount these engines on the 76 are established and widely available. As far as I know, nobody has put American engines on the 76 yet.”

“Okay. When can we get them?”

“He is taking delivery in New Delhi early next month. I want to have both of our 747-400 freighters waiting there when the engines are delivered. I don’t want the engines to sit around while my guy ponders everything.”

“I agree. That makes sense.” Stein thought for a moment and then continued. “We still need to train some crews. How do we do that?”

“The fastest way is to put an ad out and hire pilots and flight engineers with ratings and histories on the Il-76.”

“Not an option. We will use Israeli crews that need to be trained.”

“All right. I can arrange the training. With experienced pilots and engineers, it won’t take long.”

“Can we train them in India?” Stein asked.

“Yes, absolutely. Is that what you want?”

“Yes.” Stein thought for a moment. “How long to put the new engines on?”

“With my best crew from El Al, I could swap out the engines and make all related modifications in a week to ten days.”

“That timing is fine.” Stein looked at a calendar on the wall. It was November 17, 2010.

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