[IMG=21185-7020]On October 10th -11th the aviation forum Wings of Russia is taking place in Moscow. Representatives of the aviation industry are discussing key issues - in particular, the continuous increase in air traffic rates, as well as the ageing of domestically manufactured aircraft and their replacement by foreign manufactured aircraft - and the resultant increase in the cost of handling domestically manufactured aircraft.
Experts forecast that in the coming years domestically manufactured aircraft will be replaced by Boeings and Airbuses: even now they are more effective in terms of purchase and efficiency.
The Director of Phoenix Project Management, Peter Smith, points out that at present 17 national airlines use 150 foreign manufactured aircraft, with the number set to increase to 200 in 2007. ‘In order to reduce maintenance costs of these aircraft ($550,000,000 in 2007) Russian airlines should follow the lead of S7 Airlines in organizing their maintenance programmes, preparing training programs abroad for personnel - as well as improving the legislature’ the expert said.
One more problem for the domestic airlines is their inability to compete with foreign ones. For the last five years, passenger numbers on foreign airlines working in the Russian market has increased from 4,000,000 to 7,200,000 passengers. Anatoly Golomolzin, Deputy of the Head of the Federal Antimonopoly Service of the Russian Federation, said that starting from October 26th the new antimonopoly law ‘On Competition Protection’ will come into force. The law gives airlines the right to access to the fuel market and the chance to choose a fuel supplier.
The new law also focuses attention on rules designed to ensure equal access to airports for airlines - in order to eliminate possible ‘behind the scenes’ agreements. Furthermore, the Federal Antimonopoly Service of the Russian Federation will monitor fuel pricing at 60 airports, stating that ‘cases of unreasonably high fuel rates at the airport will be investigated’.
However, these steps do not represent a panacea for the industry. Vera Evsukova, Planning and Control Director of S7 Airlines insisted that ‘the core problems are monopoly of suppliers, customs barriers and imperfect legislature. Fuel prices in Russia are equal to those in Europe, but customs restrictions prevent modernization. Moreover, aeronavigation rates here have increased considerably’. She also added that from November 1st 2006 aeronavigation rates will double as a consequence the increases in air traffic rates - resulting in further cost hikes for airlines.
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