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Russia is ready to let foreign low-costers enter the market

14:29, 22 октября 2012

The government of Russia is actively discussing the possibility of inviting foreign low-cost carriers to the country's aviation market, including domestic routes. The issue of the reconstruction of infrastructure for the Russian discounters is being discussed as well. The head of the Federal Antimonopoly Service (FAS), Mr. Igor Artemyev reported on the subject following the results of a meeting with the governmental commission. The discussed questions were related to the competition and development of small and average enterprises.

The office of Mr. Igor Shuvalov, the Deputy Prime Minister, explained that until the end of the year it had been entrusted to the Ministry of Transport and the Ministry of Economic Development and Trade to present offers on the development of affordable air transportation. According to the first Deputy Prime Minister, the scheme was offered by two departments. It might be tested on a separate route, or within the region chosen by the government. Some information has not been specified as of yet, for example the regions and airlines that wish to work with Russia. The official representative from the Ministry of Transport declared that the assignment from the governmental commission had not arrived yet. However the questions about the development of domestic low-cost airlines are being discussed in the Ministry of Transport, however foreign airlines can not work in Russia because of a legislative ban.

We can not yet say that the experience on the development of cheap air transportation in Russia has been successful. In due time the businessman Alexander Lebedev declared his intentions about creation of Red Wings discounter, but then he dismissed this idea and began to develop charter transportation. A few years ago Avianova and Sky Express airlines tried to prove that low-cost transportation in Russia could be possible, however in the autumn of the last year both carriers, with a difference in some weeks, stopped their existence. Thus it was partly possible to call the activity of "Avianova" successful: the route network of the company totaled to more than thirty destinations, the passenger traffic exceeded 1 million people a year. However "Avianova" did not become a profitable airline and this provoked ta conflict between them and their investors. As a result the project was led to a closure. Not long after, "Transaero" and "Aeroflot" declared their desire to enter the market of cheap transportation.

The offer to invite foreign low-costers to Russia did not rise spontaneously: According to informal data, several months ago the Hungarian Wizz Air addressed an offer to the Ministry of Transport, it entailed building a base in Russia and beginning flights within the country. The problem with this is that domestic carriers might act against the foreign low-cost-companies. The official representative of "Transaero"noted that no country in the world that has an aviation system around the world is allowed to work on domestic airlines.

From the the consumers point of view the initiative of the government looks good and well, but from the point of view of Russian aviation it will lead to a recession. The former marketing director of Sky Express (nowadays the general director of the internet agency Aviacassa.ru) Maxim Poberezhnik has said that there were two low-cost-carriers in Russia– "Avianova" and «Sky Express», but they could not cut any wages as their American and European colleagues do. Many questions have still not been been solved, for example: The exclusive sale of fuel to the airports, having navigation services provided and the airports themselves. There has also been difficulties with the registration of imported liners from customs. Now the only way Russian airlines can really reduce any expenses is by cutting the meals on board and introducing luggage restrictions. For some reason the government do not render protectionist measures for Russian aviation.

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