On Reduction in Russia’s Domestic Airline

Under the guise of fighting for the safety of flights it is proposed to reduce the number of airlines. The draft decree of the Ministry of Transport amends the paragraph 8 of the Federal Aviation Regulations so that all international and domestic airlines operating in three regions or more will be required to have not less than 20 aircrafts. It is doubtful that these measures can guarantee the safety of flights.

According to the state program of safety in civil aviation approved by the government’s decree of May 6, 2008, safety is ‘the state of air transport in which the risk of injury to persons or damage to cargo is reduced to an acceptable level and maintained at a lower level through a continuous process of identifying hazards and control of risks’.

How the number of aircrafts owned by an airline can reduce such risks is not clear.

The official logic is simple: small airlines get in accidents

more often than the bigger ones and, therefore, safety can be ensured by banning small companies.

However, such restrictions can be considered as ‘unjustified barrier to business’ which raises the question whether the proposals comply with the antimonopoly legislation.

Most foreign laws on the safety of civil air transport do not have such restriction. It seems it is entirely Russian know-how.

The Ministry of Transport’s proposal will result in reducing the number of airlines on the Russian market.

Back in 1996, it was decided to de-monopolize air transportation in Russia and encourage competition with the view increasing quality and accessibility of flights. In the letter ‘On development of competition in international air transportation of passengers’ of May 20, 2010 the Federal Antimonopoly Service emphasized the positive effect of competition in the airline industry.

In our view, the proposed developments are against this course and may become the subject to scrutiny by FAS by own initiative or by the initiative of airlines.

Muranov, Chernyakov & Partners