“Fostering competition will benefit passengers and air carriers”, - Volodymyr Omelyan, the Minister of Infrastructure of Ukraine, said during the participation in a Round Table “Liberalization and Development of the Aviation Industry in Ukraine: Initiatives and Challenges”, which took place at the American Chamber of Commerce (ACC).

According to the Minister of Infrastructure, in 2016 there were 3.7 billion passengers on air carriers.  Also in 2016, low cost carriers crossed the milestone of 1 billion passengers. According to the International Civil Aviation Organization, or ICAO, in 2016 the share of LCC was 28% of total international scheduled passenger traffic.  In Europe, the share of low cost carriers was 32% of passengers. Total passenger growth helped increase the number of low cost carriers, particularly in countries with unstable economics.

“Visa-free regime opens new opportunities to Ukrainians to travel to the EU countries easily and for tourist to come to our great country.  But the obstacle is not just reasonable fares of air tickets. It is also the availability of service.  How often have you tried to fly from Kyiv to Odesa and ended up taking the train, car or simply did not go.  The population of Ukraine is 42, 4 million, and despite around 30% growth of air passengers in 2016, all Ukrainian airports served only 13 million passengers. In the neighboring countries such as Poland, where population is 38 million, air passenger’s traffic is 34 million; in Lithuania with around 3 million populations, airports served 4.8 million passenger, Georgia’s 4 million population had air passengers of - 2.8 million. Clearly Ukraine is underserved market, millions of Ukrainians choose European airports to travel to EU and beyond via Poland or other aforementioned countries. It is not just the airport that is underserved, but our tourist industry, hotels, restaurants and related industries are missing out.  Ukraine has to liberalize market to attract new airlines, to stimulate air companies to open new routes and increase frequencies. Only then will we see air ticket prices become reasonable and service improved”,-Volodymyr Omelyan said.

According to the Minister of Infrastructure, the Ministry of Infrastructure, to encourage aviation activity, has launched the process to lower the passenger fee at Kyiv Boryspil Airport 24% to $13.00. The passenger fee was increased from $13 to $17 in 2008 to account for the cost of the new terminal.  Passengers have varied in the 10 years, but the passenger fee has not changed. This new passenger fee will be for all air carriers at Boryspil. 

Volodymyr Omelyan stressed that this is the first step towards air carriers and passengers: “After the Order is officially approved by the required State Bodies, Boryspil Airport can make amendments to current Incentive plan that was recently presented to Airlines. We are happy that after such a long pause, the Airport supported the Initiative of the Ministry to provide fare discounts to all carriers.  We are encouraging an incentive plan that will stimulate current carriers and new carriers to increase service to existing routes and to take the risks of opening new destinations.  There is no special treatment for Low cost carriers.”

The Minister of Infrastructure said that Fostering of competition will benefit passengers and air carriers: "Passengers will positively react by increasing the frequency of travel. Passenger benefits will be lower fares and better service. Air carriers will benefit from increased demand."

The Minister of Infrastructure also noted said that if we talk about the presence of an LCC at an airport leads to more competitive air fares: “Since 2000, it was reported in 2017 that competition and efficiencies have lowered air fares up to 40%.  Even the potential presence of a specific LCC on an airport pair had a far stronger impact on air fares than the actual presence of another network carrier.”