Russia may let foreign airlines fly domestic route



Moscow: The Russian government is considering giving foreign low-cost airlines access to domestic routes in order to develop internal competition and cut air ticket prices.

"The issue of inviting foreign low-cost airlines here and developing infrastructure for the creation of Russian low-cost air carriage is now being discussed very actively," said Igor Artemyev, head of the Federal Anti-Monopoly Service (FAS).

A government meeting on competition and the development of small and medium businesses agreed on urgent measures to develop competition on the domestic airline market and cut air ticket prices, Artemyev said.

The measures to increase competition on the airline market will also apply to fuel and filling facilities and airports, he said.

Deputy Transport Minister Valery Okulov, who oversees the domestic aviation sector, said the ministry has also drafted a law allowing foreign pilots to work on Russian airlines.

Currently, Russian law forbids foreign pilots from flying aircraft within Russia unless they are taking off or landing there.

Russia's Association of Air Transport Operators warned earlier this year that domestic airlines were facing bankruptcy over soaring operating costs, particularly fuel prices.

The aggregate losses of Russia's top 35 airlines hit 14.5 billion rubles ($450 million) in 2011. Of these airlines, 22 companies had posted profits in 2010.

Air ticket prices increased by 11.8 percent on average in 2011 whereas aviation fuel prices soared 30.7 percent, while ground maintenance costs have risen by 119-211 percent in the past five years, the association said.

PTI