Passenger planes have become a part of our life since the Victory, when commercial aviation started developing in USSR. Every soviet citizen could afford a 20-rubles ticket to Sochi or Simferopol, and every regional center and large city had its own airport.

However, the situation has changed since Ukraine's independence. In 1990s many airports were abandoned and air traffic was reduced to minimum. Only in recent years the sector shows signs of revival. Thus, the State aviation service reports that in 2010 the air traffic was restored by 19.2% and in 2011 it grew by another 22.7%. Last year airlines transported 8.1 million passengers - 1.285 million people took domestic flights and 6.821 million - international flights. Peak months on passenger traffic were July, August and September, 997 thousand, 1040.9 thousand and 918.9 thousand passengers respectively.

In favor of low-cost

93% of air traffic fell on five leaders - "AeroSvit", "International Airlines of Ukraine" (MAU), "Wizz Air Ukraine", UTair Ukraine (subsidiary enterprise of UTair Russian airlines) and "Roza vetrov" (wind rose) low cost Russian company. The average traffic load of national airlines on international flights grew from 53.9% in 2011 to 62.4% in 2012, and on domestic flights - from 52.7% to 56.1% respectively, first deputy head of the State aviation service Oleksandr Grechko specified.

Analyzing by countries, the biggest international traffic goes to/from Russia (27%), Germany (10%), Turkey (8%), Israel (5%), Austria (4%), Italy and UAE (4% each), Georgia and the Netherlands (3% each). About 60% of traffic is provided by "Boryspil' airport, 8% - by "Simferopol", 7% - by "Donetsk", 6% by - "Odessa" and "Zhulyany", 4% - by "Kjarkiv" and "Lviv", 3% - by "Dniepropetrovsk.

Low cost airlines have already taken strong positions on the Ukrainian market, expert on aviation Oleksiy Sinitski says. Thus, Wizz Air was one of the first companies to apply for the niche after the collapse of "AeroSvit". Director General of Wizz Air in Ukraine Akosh Bush told ForUm that the airlines are interested in such important destinations as Tel-Aviv, Istanbul, Dubai, Vilnius, Prague, Warsaw, Larnaca (Cyprus), Naples, Thessaloniki, Moscow, Saint Petersburg. The final decision on assignment of these destinations is expected in March of 2013. More destinations mean bigger fleet. Thus, according to Bush, Wizz Air Ukraine now has two planes Airbus A320, the third one will start flying in March and the forth plane is expected in July, which will enable to increase the traffic into Ukrainian cities up to 1.3 million people. "We also intend to increase investments to $660 million per year, to extend the fleet to eight airplanes and to increase the annual traffic twice - up to 2.6 million passengers."

Other European low cost airlines, like Ryanair (Ireland), EasyJet (Britain), Germanwings and Air Berlin, are also interested in the Ukrainian market. Ryanair, in particular, announced at the beginning of 2012 that in spring would launch the first flight. However, for various reasons the project was postponed. Germanwings, Lufthansa subsidiary company, already flies in some Ukrainian airports.

Prices down

Among positive tendencies for consumers, there is an intention of classic airlines to reduce prices by means of Internet sale. Earlier it was the secret weapon of low cost companies, which save money on food and box-office personnel. Low cost companies offer cheap tickets through their websites, while buying tickets in "physical" offices increases the price by 150-200 hryvnias. From now, 'big' companies also develop online sales. Lufthansa, for example, offer return tickets to Dusseldorf and Frankfurt on the Main at UAH 1600-1700, and Air France will bring you in Paris approximately at the same price. If low cost companies traditionally increase the prices before the flight date, "classic" airlines have fix prices until there are discount seats. Passengers comment that in such cases it is more advantageous and cheaper than ordinary low-cost. 

Moreover, economist Ruslan Pavlenko notes that the annexation of Kyiv to the European air space will play a significant role for price policy. "Flight prices in Ukraine are more expensive than in Europe, but joining the European space can assist to price fall. At the recent summit in Brussels, the participants spoke that signing the agreement on common air space is one of the priorities for 2013." Let's hope that the situation will change if not this year, then the next one for sure. 

At the same time, specialist of the Center for economic and political analysis Vadym Slobodyanyuk adds that the permission for airports to set tariff policy on airport charges, introduced by the Infrastructure Ministry in 2012, can also contribute to the price fall. Experts note that European airports earn 70% of income from "non-aviation" activity - rent of commercial areas, parking complexes, etc. "We do otherwise. Daily bread of Ukrainian airports is aviation activity, airport taxes and duties. Earlier it was impossible to change the situation due to inflexible tariff policy. However, thanks to the permission everything can change for the better," Slobodyanyuk says.

According to business manager of Wizz Air Ukraine Natalia Artemova, the permission will enable airports to be more flexible with prices and to introduce various marketing instruments to attract new airlines. "Structure of the airport charges must encourage growth of airlines and development of the whole market. New policy will enable to set affordable prices for domestic and international flights. Moreover, charges in regional airports should be even more competitive to provide development of the region and decentralization of air traffic. We hope that the given initiative will provide more opportunities for cooperation with regional airports."

One way or another, the domestic air market grows and the competition toughens with it. In the race for clients, airlines are ready to hold and lower prices, and it means that flights may become even cheaper in 2013. 

Andriy Boyarunets


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