Optimistic estimate throws down gauntlet to civilian authorities (397 words)

Published: 5/8/2001

Lieutenant-General Mikhail Kizilov, Head of the Ministry of Defence's department for air space application and air traffic management, is quoted by the Military News Agency as saying that the growth of aircraft traffic on the new international transpolar and cross-polar routes will lift Russian air navigation fees, from the current $250m to $4 billion a year. Kizilov cited data provided by the Ministry of Transport. The military and civilian authorities currently share nominal control of Russian air traffic, although the system is largely civilian operated. However, the civilian State ATM Corporation, founded in 1996, continues to struggle to bring the 34 regional ATC entities under central control, as the regional governments are reluctant to give up the revenue flow. Kizilov's estimates of the contribution from the new routes to increasing revenues appear to be well above the estimates that have emerged over the last 18 months. These have suggested revenues from polar routes ranging from $25m a year - attributed to Boeing - to the $75m from IATA, by 2005. The FSVT, the predecessor of the Ministry of Transport's civil aviation agency, the GSGA, estimated revenues as being around $40m a year after 2002. It is therefore difficult to see exactly where the revenue will come from, even with the 30% increases in cross-polar routes, suggested by Pavel Rozhkov, Deputy Transport Minister, earlier this year. It is also unclear why Kizilov is making these public estimates, but his assertion that the military is spending between 10-25% of its ATC time supervising civilian flights and routes indicates that the long running feud between the civilian and military authorities, over access to the lucrative revenue stream, is still ongoing. Sources within the civilian control system believe that the military, surviving on reduced defence spending, sees the opening up of the polar routes as a chance to boost funding. The full exploitation of the potential market is contingent on its active cooperation, given military air space in the region. Perhaps Kizilov's view is that the higher the figure, the more reasonable any demand in this respect might look. The full development of the new routes still requires considerable investment and the government has been in active discussion with the EBRD and other lenders, over funding for a $130m navigation system to cover the region.

Article ID: 2516