Passengers stand to gain the most from the signing of an Open Skies Agreement between Ukraine and the EU
Passengers stand to gain the most from the signing of an Open Skies Agreement (OSA) between Ukraine and the European Union. It was a conclusion of the expert discussion “Common Aviation Area with the EU: how to integrate Ukrainian sky?”, which took place on November 30 in Kyiv. The event was organized by the Civic Expert Council with support of the European Program of the International Renaissance Foundation.
Experts say greater amount of transportation options might reduce the rates for domestic transportation by 2-3 times and 1.5-2 times – for international one. Such an agreement will ensure European safety standards during flights, a high level of passenger services, more flights and more routes, and a wider range of ticket prices for air travel.
“One of the solutions is to create a national carrier, for there is no flagship air company in Ukraine today. Both Ukrainian airports and the government will benefit from Agreement. The former will find a new lease of life and the latter will prove the ability to fulfill commitments to Europe,” senior research officer at the Center for Economic Research and Policy Consulting Irina Kosse said.
When entering Ukrainian market, leading European Low Cost airlines will increase state revenues by 10-15%. That is one of the advantages of Ukraine’s accession to the SAP. Low Cost airlines carry up to 50% of all passengers in Europe, while their share does not exceed 10% in Ukraine. Seeing that not more than 5% of Ukrainians prefer air transport, it is Low Cost Airlines that will get new customers.
Arthur Vinyukov-Proschenko, associate professor of Air transportation Department at the National Aviation University, suggests that Ukrainian airlines should be in trend and forget about leadership. “Unfortunately, we must acknowledge that the development of Ukrainian transport is being controlled in Ukraine. Poland sacrificed its LOT airlines, however the local consumer had the best of a bargain. Airports need to be developed, no one promises “golden showers” in terms of euro, but they must come to terms with Low Cost. Why don’t we give the same opportunity to Ukrainian passengers?,” expert said.
However, the analysis of the air passenger market today suggests that neither domestic airlines nor the country’s airports are prepared for open skies. Serious reforms are needed in this industry, airlines need to upgrade and expand their fleets, airports need to upgrade their aeronautic equipment, demand needs to be stimulated among local travellers, routes need to be expanded, and the monopoly on fuel supplies and ground services needs to be dispersed.
Experts inform that Ukraine’s Aviation infrastructure is one of the most expensive in Europe, still being one of the least effective. The main reason for this is lack of effective competition, for Ukrainian air transportation market is highly monopolized. The total share of “Ukrainian Aviation Group” in the total of scheduled passenger air travels according to the results of the first half of 2011 exceeded 50%, which bears the mark of collective monopoly in the market.
“The issue of “open sky” is solved by two thirds. One problem is still to be resolved: Ukrainian airlines are not ready for competition, and the issue of visa regime for Ukrainian passengers should be also worked out,” Oleh Petrovsky said, first deputy director of Zhulyany Kyiv Airport.
The European Open Skies Agreement (OSA) is a bilateral agreement between the European Union and third countries to establish common safety standards and liberalize market relations in aviation. In essence, an OSA establishes a free trade area for the aviation industry. A common airspace means merging the air transport markets of Ukraine and the EU.
Civic Expert Council
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The Goal of the European Program is to promote Ukraine’s European integration by providing financial and expert support to relevant civil society initiatives.
