Russia"s air cargo operators blame customs officials and attempts to form a monopoly on traffic with China

Published: 4/4/2000

Most of Russia"s local air cargo fleet has been grounded for the past week or more, disrupted by increased scrutiny by Russian customs officials and claims of attempts to form a monopoly on traffic to and from China – a major source of cheap consumer goods. Zameron Kurtani, executive director of Moscow-based East Line airlines, one of Russia"s leading cargo carriers, said that airplanes were grounded after the State Customs Committee imposed a 400% increase for import duties on consumer goods brought into Russia via chartered air cargo flights. These flights make up about 70% of the air cargo market in the country, with air freight from China being a sector where regulation has been particularly lax. However, a Committee spokesman denied that any such order had been issued and countered that customs duties were the result of an unwritten order issued by the head of the State Customs Committee. A source at the Federal Air Transport Service, who asked not to be identified, has claimed that the air cargo market was being influenced by a company that was trying to gain exclusive rights for air cargo flights but declined to name the company in question. However, fingers are being pointed at the women who runs the Russian Orthodox Church"s main charitable organisation, Gulya Sotnikova, who is thought to be trying to create a sole authorised enterprise which will have exclusive rights to organise and sell orders for international cargo flights. The Russian Association of Cargo Airlines and the Air Transport Association said that they had written to the First Deputy Prime Minister Mikhail Kasyanov asking him to intervene on their behalf. However, Kasyanov"s press office was unable to confirm that his office had received any such letter. Operators of chartered cargo flights are blaming their misfortune on Sotnikova whose career and the charitable fund she founded in January 1997 under church auspices are intimately linked to the air cargo business, with most of her cargo business transferred to the charity in 1997. Kurtani said he believes Sotnikova orchestrated the duty increase as part of her plan to shut out her competitors and accused her of planning to use her connections, cultivated by her association with Patriarch Alexy II, to get her own air cargo operation exempted from the high import tariffs since it operates under the auspices of the church fund. The air cargo industry has said that the grounding of the flights is causing tens of million of dollars in losses for cargo operators and the national budget. According to Paul Duffy, an independent aviation analyst based in Moscow, around 50,000 tons of air freight is imported from China alone every year, making up 40% of the cargo market. Firms trading in inexpensive imported goods prefer to fly the goods in because enforcement of customs regulations for chartered air freight has been notoriously lax. He also noted that, until recently, the customs service rarely inspected chartered flights carrying cargoes of under 35 tons, roughly the capacity of a typical Russian cargo plane.

Article ID: 1626