Regulations and noise requirements hinder growth (670 words)

Published: 10/23/2000

A dispute emerged at the annual conference of the Russian Businessjet Association (ADA) annual conference on the 18th October 2000. Between the association's members and the representative of the new GSGA (State Service of Air Transport) Valery Selevanov , Head of the General Aviation Department, regarding the development of the industry and its administration. In a keynote speech Eugeny Bakhtin, ADA Chairman and General Director of AVCOM (Aviation Commercial) a UK/Russian joint stock venture, said that the current legislation remains unfriendly and complicated, slowing growth of the sector within Russia, despite “a number of small steps” made in operating regulations. According to Bakhtin since the ADA was founded in 1997, it has had only moderate success in promoting the interests of its members through assisting the authorities in the preparation of legislation relating to business aviation and encouraging them to accelerate the process of liberalization in an environment that requires carriers to operate under the same rules governing the scheduled airline sector, resulting in more than 90 licenses and authorities being required to do business. Some achievements have however, been made as witnessed by two recent GSGA orders simplifying regulation affecting business aviation. The first raised the weight and passenger limits that required operators to give the authorities notice of flight across air traffic control zones. This has meant that the requirement for aircraft carrying less than nine passengers and weighing under 16 tons to report movement across one zone within 2 hours and within 4 hours if crossing more than one zone has been lifted to aircraft carrying 25 passengers at least and 50 tones in weight. The second change frees the business operators of the requirement to get the approval of the scheduled carriers on particular routes were they have the licence, prior to flying the routes. The issuing of these two orders reflects in the view of the association, their growing role in framing the legislation affecting their activities and they are currently in the process of putting together draft legislation such as Federal Aviation Rules (Russian acronym FAP) and a renewed version of Russia's Air Code that is planned for hearings in the State Duma next month. The immediate threat for the business jet operator however, may not be the slow movement of change within Russia and the CIS, but the implementation of international noise regulations on a fleet large made up of VIP conversions of Russian aircraft, that fail to meet the new standards for flight in Europe. Currently, there are 20-25 business jet operators in Russia and 30 service providers, operating a fleet of less then 100 aircraft (including corporate fleets). A handful of Falcon-20/-900/-2000 and BAe-125, are however, heavily outnumbered by VIP conversions of Yak-42, An-74, Tu-134 and Yak-40s. According to Bakhtin, over 50% of all business aviation flights are international, with some companies having 90% of their business from international travel. For those operators that have to replace fleets the cost are however, high. The purchase of modern aircraft or their hire is costly because of a heavy import tax and there is no equivalent aircraft available from a local producer. First Deputy General Director of Phoenix Airline, former head of Aeroflot-Plus , the business jet subsidiary of the flag-carrier, says that business jet operators are currently not ready to pool their scarce resources to buy a new western aircraft in fractional ownership despite the poor operational outlook. The result of this reluctance, he believes will be considerable contraction in the market with perhaps only one or two of the current 20-25 operators surviving into 2002. The introduction of noise complaint Tu-134M jet with D-436T engines and a VIP version of 50-seat Tu-324 regional jet, currently under development, may help some of the operators beat the problem. Both programs however, have financial difficulties and for various reasons have failed raise the funds necessary to complete development. It is also unlikely that the demand offered by the ADA will immediately resolve that problem.

Article ID: 2142