Ukraine’s biggest airport, Kyiv’s Boryspil International Airport, has sent a contract to Irish low-cost airline Ryanair for signing, but experts say a deal might still not be done.
Pavlo Rjabkin, Boryspil International Airport’s CEO wrote on Facebook on July 5 that he had signed the contract and sent it to the Ryanair’s central office for signing.
“It took less than two weeks for us to sign the agreement after the passenger tariffs for airports were decreased by the Infrastructure Ministry of Ukraine,” Rjabkin wrote. “The old tariffs were the only factor that put the process on hold.”
The Infrastructure Ministry of Ukraine in June decreased the passenger tariff for airlines in Ukraine from $17 to $13.
Rjabkin added that talks between an airport and a flight operator always involve a compromise that meets their common economic interests.
However, experts say that while Ryanair is likely to sign the contract Boryspil has sent, as the airline has already started selling tickets in Ukraine, the contract doesn’t meet all of the low-cost airline’s requirements.
Andriy Guck, an attorney in law from the Ante law firm who specializes in the airlines business, told the Kyiv Post on July 6 that the main problem concerns the Kyiv-London flight.
“Boryspil sent a standard airport-airlines contract, which is obviously unacceptable for a discount airline like Ryanair,” Guck said. “Boryspil refused to fulfill Ryanair’s main demand for an 80-percent discount on the Kyiv-London flight, saying that this flight is not new.”
“But a ‘new flight’ means a route from airport to airport (not city to city),” Guck said. “Ryanair definitely offered a new Kyiv-London route, as it was going to fly from Boryspil to London Stansted Airport. At the moment, all the Kyiv-London flights go to Heathrow Airport.”
NEWS ITEM: While low-cost airline Ryanair announced it is to start flying to Kyiv and Lviv in October 2017, none of the two Kyiv airports agreed to accommodate it so far. Both Boryspil and Zhulyany airports claim that Ryanair wants to pay too little of a price to use the airport. Ryanair is also unwanted by Ukrainian International Airlines, the country’s airline monopolist. (Kyiv Post)
Despite the unprofitable conditions, Ryanair is likely to sign the contract, Guck said, as European low-cost airlines are fighting for new markets. Furthermore, Ryanair has already started selling tickets to Ukrainians.
Asked about the signing of the contract with Boryspil, the spokesperson for the Irish low-cost airline, Ronan O’Keeffe, responded via email: “We don’t comment on rumor or speculation.”
Ryanair in March announced it would to enter the Ukrainian market in October. It has already signed a contract with Lviv International Airport.
The arrival of the airline in Ukraine has been opposed by Ukraine International Airlines, a company belonging to Ukrainian oligarch Ihor Kolomoisky, which currently services 50 percent of the passenger flights in Ukraine and most of the flights from Boryspil Airport.
In terms of price, Ukraine International Airlines will face stiff competition from Ryanair: While the price of a one-way ticket from Kyiv to Stockholm listed on the Ukraine International Airlines website starts at 300 euros, Ryanair on its official website offers the same route for from 22 to 34 euros.
Infrastructure Minister Volodymyr Omelyan called the contract Boryspil had offered to Ryanair “a disaster.”
“Rjabkin sent an unacceptable contract,” Omelyan told Kyiv Post via Facebook. “The deadline for signing the final agreement is July 10. So now I’m trying to change the situation for the better.”
The minister claimed the Boryspil Airport managers knew the agreement they sent would be unprofitable for Ryanair but sent it anyway to avoid being blamed for delaying Ryanair’s arrival at Boryspil.
“In the next post, Rjabkin will write that Ryanair wanted too much, and that Boryspil, a unique airport of a fantastic country, doesn’t need such a demanding low-cost airline,” Omelyan said.
Read more on Ukraine’s airlines market in an infrastructure overview here.
