“Despite an overall drop in air traffic by 17 percent in the first quarter of 2013 (caused by Aerosvit’s bankruptcy, experts say), our airlines managed to hit whole year targets. The year ended with airports showing traffic growth of 7.3 percent,” head of the State Aviation Service of Ukraine (SASU) Anatolii Kolisnyk reported.
Ukraine’s upgrade by the American Federal Aviation Administration (FAA) to Category 1 in aviation safety rankings was another major achievement of 2013. As a result, now Ukrainian carriers can expand their destinations and start regular, unrestricted flights to the US. “We worked long and hard to achieve this recognition. Our downgrade to Category 2 in 2005 was accompanied by restrictions imposed on our airlines’ flights to the US. In fact, only one Ukrainian airline was allowed to fly to that part of the world. These restrictions have now been lifted. We are working with the US aviation authorities towards signing the Open Sky agreement, which will remove all restrictions,” Kolisnyk noted.
The SASU also reported that 2013 saw initialization of the Common Aviation Area Agreement with the EU and signing of a protocol of consultations, allowing further implementation of European standards in the Ukrainian aviation industry.
In addition, Ukraine adopted a new law in May 2013 allowing importation of ethanol-blended avgas. “The entire European small aviation fleet burns ethanol-blended avgas, while we had it banned, forcing aircraft to use blends of avgas that did not meet their engines’ technical and constructive requirements. I think this change is a great contribution to flight safety,” Kolisnyk explained. He also said that Ukraine already had more than a hundred aircraft using ethanol.
Overall, Ukrainian airlines carried about 7 million passengers to international destinations last year, up 1.1 percent over 2012. On the contrary, domestic traffic declined by 5.9 percent. However, the SASU’s head sees no need to close existing regional airports. After all, he said, Ukraine had all preconditions for the increase in passenger traffic, but much depended on the economic situation. “There are not enough passengers, and until economic growth kicks in, there will be no new fliers. Perhaps, the Common Aviation Area Agreement with the EU will help,” Kolisnyk said. In his view, abolition of VAT for domestic flights can serve as an incentive to increase domestic passenger traffic. “If we succeed in abolishing VAT, I think it will be a strong incentive to increase domestic passenger traffic,” he added.
As for predictions for 2014, Kolisnyk sees aviation industry growing. Ukrainian airports have already increased passenger traffic by 15 percent year-on-year in January. In addition, the SASU intends to sign a number of agreements in 2014. It plans to sign at a meeting of the Council of Ministers of the EU on March 14 the Common Aviation Area Agreement with the EU which was initialed in late November 2013. “Should we sign it on March 14, we will then work on regulations. We will need to adopt 84 regulations, which require another 400 norms to be enacted,” Kolisnyk reported. Head of the SASU noted that the agreement’s signing would mean that enactment of regulations and norms would have to be expedited. “We have offered the Ministry of Justice and the Cabinet to institute truncated procedure for approval of these documents, as otherwise, it will take years,” he stressed. Kolisnyk also predicted lifting of the current restrictions on flights between Ukraine and the EU at the beginning of the summer season in 2015.
Three more documents are being prepared for signing. These are a memorandum of understanding containing new working agreement with the EASA (European Aviation Safety Agency), a document on promoting convergence between the EU’s and Ukraine’s certification bases, and a new agreement on SAFA (Safety Assessment of Foreign Aircraft) checks. “It provides for Europeans checking on our aircraft, and us checking on theirs,” Kolisnyk explained the last agreement’s essence. Currently, the SAFA ratio is 0.92. By the way of comparison, it was 1.11 in 2013.
Overall, Kolisnyk predicted that this year would see passenger traffic growing at 10 percent. “It is airport throughput forecast, though. Airlines will have it harder, although past year’s low base means that growth can well be higher still,” he noted.
COMMENTARY
Artur VINIUKOV-PROSHCHENKO, assistant professor of logistics and transportation organization at the National Aviation University:
“I think we will see further decline in the domestic aviation market, because Ukraine lacks suitable aircraft for this role. The only company having such aircraft is UTair. They operate turboprop aircraft, the most suitable type for the domestic market of Ukraine. The economic situation of the nation is, in fact, not at its best, so I see no reasons to expect growth.
“As for international air travel, it seems to me that growth will not exceed five, at most seven percent. Again, it will be for economic reasons, coupled with the fact that foreign airlines are having difficulty doing business with some of our airports. While these obstacles remain, one should not expect a large influx of international air carriers.
“Documents on open sky which have been signed and will be signed are generally those needed by the industry. There is nothing unusual with them, and everything is going the right way. I would add that it is a little too late, though. But still, better late than never. Opening the sky will stimulate development, but we need to answer the question of whether now is the best time for development and increasing passenger traffic? After all, the Ukrainian economy is not in the best condition now, and Turkey being a strong competitor does not help. Secondly, we face the aggressive policy of European companies, such as Wizz Air. They are actively moving toward the Russian market. Previously, much attention was paid to the Ukrainian market, because Russia’s one was closed, but now the opposite is true. They are holding negotiations with Russia, and it is opening a bit of its market to foreign companies. I think that the time has passed when one could seize a moment and expect a sharp increase in passenger traffic.
“We also need to resolve the issue of the aviation services cost. They are expensive for foreign carriers operating in Ukraine, which is also limiting their entry into our market. I would not say that those companies that do enter it will become significant players or achieve significant jump in air travel.”
