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Téann taisteal aeir go #Ukraine suas

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Úsáidimid do shíniú suas chun ábhar a sholáthar ar bhealaí ar thoiligh tú leo agus chun ár dtuiscint ortsa a fheabhsú. Is féidir leat díliostáil ag am ar bith.

 

Le linn na 2012 UEFA European Championship the Europeans truly discovered Ukraine. The volume of passenger traffic between the EU and Ukraine has been steadily increasing year by year. The final of the UEFA Champions League, held in Kyiv on May 26, 2018 between  Real Madrid and Liverpool as well as the matches of Ukrainian football clubs in 2019-2020 European competition season, which took place in Ukraine, causing considerable concern of tens and hundreds of thousands of European fans who came to Ukraine to see sports competitions. Each of them brought back home many positive impressions from what he or she have seen in this country, and shares familiar details of the trip.

Picturesque Ukraine

In addition to sports, one can see in Ukraine outstanding architectural monuments belonging to the list of UNESCO World Heritage Sites: St. Sophia Cathedral, Kyiv-Pechersk Lavra and many other monuments. 

Air transportation from Europe is often used by Jewish representatives who visit Ukraine in the holy places of their people in Uman, Hluhiv, Berdychiv and other cities.

The EU citizens have discovered Ukrainian ski resorts, such as Bukovel, Dragobrat , Slavske, Pylypets. Ukrainian resorts are similar to the  European ones in terms of  comfort, but at the same time their cost is much cheaper.

Aiseolas

The Europeans, who have once visited Ukraine want to return to this beautiful country, because of its friendly citizens, excellent cuisine and very moderate prices.

Economic component

The Czech Republic, Poland, Croatia, Bulgaria and other Eastern European countries have significantly increased their economic potential in recent years, due to investments in tourist infrastructure, recreational facilities and transport.

Ukraine also has significant tourism potential: the Carpathian and Crimean mountains (the latter currently are on temporary uncontrolled territory), unique rivers - the Dnieper, the Desna, the Pidennyy Bug. Other famous tourism sites are Synevyr and Shatsky Lakes, resorts of the Black and Azov seas, “Seven wonders of Ukraine”, unique fortresses and castles, beautiful city architecture of Kyiv, Lviv, Odessa, Kharkiv, Dnipro, Chernihiv and many other cities.

In economic terms, passenger traffic to Ukraine has been increasing for several years due to cheap airfares. In 2019, Ukrainian airports received a total amount of about 23 million passengers. Most of these transportations are international, since there is little demand for domestic flights.

In terms of the number of passengers, Ukrainian aviation industry ranks second among Eastern European countries, second only to Poland https://cutt.ly/7r2onV7 . Since 2016, passenger traffic in the aviation sector has increased by 100%. Introduction of the visa-free regime with the countries of the European Union and the reasonable policy of the Ukrainian authorities promoting air travel have significantly contributed to this phenomenon.

This year, the price of air tickets to Ukraine can increase up to 15 %. In 2020, the Ministry of Infrastructure of Ukraine is planning to increase significantly the rates for air navigation services for planes in the main international airport of the country - Boryspil. This is enshrined in draft order "On Amendments to the rates of payment for services of air navigation for the aircrafts in the airspace of Ukraine" https://mtu.gov.ua/projects/view.php?P=257 .

The cost of the ticket consists of the price of aviation fuel (28%), airport charges (11%), airport service providers rate (10%), navigation fees (7%), national fees (12%), related services rate (12%). At the same time, airlines still keep their rate (29%).

At the beginning of the year, in Europe, the average rate for non-scheduled air navigation services at the airport and in its area was 166 EUR per unit of service. It has decreased by 6% compared to 2019. The Ministry of Infrastructure of Ukraine proposed to increase the rate amount to 396.57 EUR, which is 2.4 times more than the average rates in European airports. The current rate for Boryspil International Airport is now 210 EUR.

Airspace management in the European Union is carried out by the Member States participating in the EUROCONTROL project, https://www. EUROCONTROL.int/ - an intergovernmental organization regulating air traffic. Ukraine is also making significant efforts to sign the Common Aviation Area Agreement with the EU.

According to EUROCONTROL document #07.60.01 "Principles of determination of cost rates for route charges and the calculation of unit rates", which is operative in Ukraine, provided that the fee for the services of air traffic on the route must reflect the costs incurred either directly or indirectly in the process of providing route services, including EUROCONTROL costs.

According to the provisions of the International Civil Aviation Organization (ICAO) documents (Doc 9161 and Doc 9082), it is established that the distribution of air navigation costs among airspace users should be equitable.

Aviation industry experts emphasize that Boryspil International Airport is the main aviation gateway of Ukraine; it serves more than 97,000 flights a year, while all local airports in Ukraine serve totally 85,000 flights. A significant increase in rates of air navigation service will cause a situation, in which the airlines (for which Boryspil is the main airport ), will be forced to fund additionally the work of the companies that use the services of other Ukrainian airports.

Transport strategy

Bearing in mind the lowest income per capita in Europe, the Ministry of Infrastructure of Ukraine is planning to set the highest air navigation services rate in Europe. Minister Vladislav Krykliy had been the head of the Permitting Center of the Ministry of Internal Affairs before his appointment to top Ministry position. Nevertheless, the development of the national transport strategy for Ukraine, which has a unique potential for cross-border transport corridors, is certainly necessary and requires relevant skills and experience.

The justification for the need to increase the rate for the air navigation services looks very strange. The Ministry of Infrastructure of Ukraine emphasizes that the new rules have been harmonized with EUROCONTROL requirements and have been calculated according to international standards. In fact, it is not so. There was no interaction with European regulatory agencies, and the Ministry of Infrastructure has not confirmed the existence of effective control over financial activities of the national provider of air navigation services – state-owned enterprise "UkrSTATSE". There were no meaningful consultations with the companies-users of the airspace of Ukraine.

The main expenditure of "Ukraerorukh" costs - 70% are the spendings on maintenance of the personnel. The productivity of dispatchers in Ukraine is six times lower in comparison to Eurocontrol member countries. For example, a manager in the Dnipro regional branches serves 43 flight hours per year, that is 40 times less than the average performance among members of Eurocontrol. The inefficient operational structure of production support from the four regional centers, while other European countries control the territory of Ukraine from one or two centers, leads to excess numbers, unnecessary spend of operative and administrative costs, etc. In the states  - members of Eurocontrol, there has been a long decline in support staff per dispatcher, and as of 2018 the number of support staff per dispatcher was 2.1 units. In Ukraine, there are 4.4 auxiliary employees for each dispatcher, which exceeds the European rate more than twice. Aviation experts say that this is the reason for the excessive cost of providing air navigation services in Ukraine.

If the increase initiated by the Ministry of Infrastructure  is effective, than the revenues of UKRSATSE from terminal ATS shall be 2.5 times more than the costs of the relevant services.

In May 2019, by its decree #293, the Cabinet of Ministers approved the Concept of Boryspil Airport Development by 2045 as an aviation hub. Nevertheless, without relevant economic conditions in Ukraine it will be not possible to turn the airport Boryspil into international aviation hub.

Limitations and barriers policy

Having regard to all the circumstances in which companies have to work in the aviation industry of Ukraine, it is clear that they work not due to the care of the state, but in spite of it. Proposed rate of payment for air navigation services for 2020 are not economically justified and irrelevant to the documents of ICAO and Eurocontrol.

On February, 12, 2020 the meeting of the Airport Committee of the International Airport Boryspil was held. Its participants condemned the Ministry of Infrastructure's plans to double air navigation service rates. It is unknown whether the regulator listens to the opinion of a professional association.

There are many precedents for making unjustified decisions in the field of transport and communications. In most countries, there is a zero rate of excise duty on aviation fuel value added tax. This enables passengers to enjoy affordable and convenient services from airlines. However, in Ukraine, state regulators adhere to a strict approach. From the beginning of 2019, in order to combat the misuse of aviation fuel, in accordance with the amendments to the Tax Code, excise duty rates on aviation fuel have increased in 10 times. As aviation fuel in Ukraine is expensive, it therefore affects the cost of tickets for passengers.

The Ministry of Infrastructure is systematically involved in various high-profile scandals, including corruption. Recently, the Minister of Infrastructure received a proposal to appoint Dmytro Padalkin as the head of state enterprise “DerzhHidrohrafiia”. This person was under justified allegations of corruption and abuse of office in his own interests https://cutt.ly/5r2bVPV .

Such scandals and allegations of corruption are already commonplace for Ukraine and do not surprise anyone. But in civilized countries is simply unacceptable when officials use their position and influence in order to get illegal gains from the adoption of regulatory decisions.

What should be the right solutions?

Accounting Chamber of Ukraine according to the 2015-2017 Audit years found out, that unjustified expenditure of public enterprise " Ukraerorukh" which is under control of the Ministry of Infrastructure, amounted to about 70 million, inefficient expenditure of the costs is more than 300 million UAH.

Instead of returning order in financial activities of "Ukraerorukh" and Ukrainian airlines creating appropriate conditions and incentives to increase passenger traffic, further growth of Ukrainian market of air transportation, the Ministry of Infrastructure plans to significantly increase the rate charges for air navigation services.

Without any doubts, it will increase the cost of tickets and reduce passenger aviation companies through the airports of the country, including Boryspil. With its unique geographical location, Ukraine could become a major European transport hub, while Ukrainian regulator goes through simple solutions with very questionable justifications thereto.

According to the Air Code of Ukraine and the document of Eurocontrol number 07.60.01 "Principles of determination of cost basis for route charges and the calculation of unit rates" the rates for the AIE cannot be changed in the middle of the year, any changes can be made only from 1 January of the respective year. Thus, in this year, according to the requirements of Eurocontrol, the rates for air navigation services cannot be changed.

The charges may only take place after consultation with airspace users, conducted during the previous year on a particular schedule. There was no consultation last year on changing rates for 2020.

Eurocontrol, contrary to the statements of the Ministry of Infrastructure of Ukraine did not not expected and not coordinated any new rate charge of air navigation services.

The introduction of rate charges for aeronautical services is economically unjustified and discriminatory for airlines that carry out flights in airport Boryspil because the service area of the airport is many times less than the cost of air navigation services around other airports.

The actual cause target of increase in charges for air navigation services is inefficiency of the provider (low labour productivity, excessive staff, bad organization of work, etc.). There are no real economic reasons for increasing the rates. In the case of this decision, the rates of air navigation services in Ukraine will be the highest in Europe.

Consequently, the Ministry of Infrastructure should listen to rational calculation, position of the industry and immediately reconsider its decision taking into account the economic realities, European regulations and international experience.

 

 

 

 

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