You're reading: New aviation rules to complicate life for foreign-owned airlines

The Ministry of Justice on Nov. 13 registered a new mechanism of distributing air routes amongst aviation companies, which requires a carrier that wants the right to fly international routes to have the Ukrainian state or a Ukrainian citizen as its final beneficiary.

Companies will also have to compete for new international routes based on
scores that considers the number of previous routes flown, aircraft park and taxes paid. 

If a new
aviation company wants to get an international charter route, it will have to show that it has at least one year of experience of conducting international flights,
according to the new rules. Moreover, it may take up to two years to receive
the right to fly internationally, while the carrier would have to make do with local flights during this period. 

The local unit
of Hungary’s WizzAir, a low-cost airlines, made a statement on Nov. 20 saying
that the new regulations decreases the number of routes available to foreign
companies, which may ultimately push them out of the country. This will
also raise prices, affecting customers. 

WizzAir also
says the new rules contradict Ukraine’s intentions to join the European common
aviation area and to build a market responding to European Union norms. However,
Denys Antonyuk, head of the State Aviation Service, says
signing the Open Sky Agreement
with the EU is high on his institution’s
agenda after having been postponed twice already. 

Industry
experts and market players say these measures will boost the positions of
Antonyuk’s former employer, Ukraine International Airlines, the biggest local
operator that is a near-monopolist in Ukraine. Several investigative press organizations have shown that UIA belongs to
billionaire Ihor Kolomoisky, the famous Dnipropetrovsk governor, although he has
never publicly confirmed this. Antonyuk was a top manager at UIA and is pushing these new regulations forward. 

“The
new order will definitely strengthen the monopoly and give Ukraine
International Airlines all the means to block the entry of new air carriers on the Ukrainian market,” said Andriy Guk, legal expert on
aviation issues with Marchenko Danevych law firm. 

Guk added that the new rules will also allow UIA to control the process of
distributing routes among existing companies, because Kolomoisky’s
company will always have the advantage in competition scores. 

“Moreover,
the new order will not allow foreign capital to participate in (Ukraine’s)
aviation business, eliminating the remnants of competition,” Guk
emphasized. 

Ukraine’s
aviation market is expected to fall by up to 35 percent this year, according to
Antonyuk of the State Aviation Service, taking into account closed and ruined Donetsk and Luhansk airports. 

Kyiv Post staff
writer Oksana Grytsenko can be reached at 
[email protected].