OREANDA-NEWS. July 30, 2009. The Government of the Russian Federation adopted the draft Decree "On Approving the Rules for Access to the Services of Natural Monopolies in Airports of the Russian Federation". The Decree is of the utmost importance; it was devised within the framework of the Anti-Crisis Plan of the Government of the Russian Federation, adopted on 7th November 2008, reported the press-centre of FAS Russia.

The Rules define general principles and procedures for consumers accessing airport services. They obligate airport operators to prevent unequal conditions for consumers, have a single consumer price (tariff) policy, and ensure that information about the airport services and procedures, tariffs and charges is available to consumers. The Rules also determine priorities for allocating slots to air carriers; the procedures for considering their applications, including access to the services for providing aviation fuel to aircrafts; and settlement procedures.

In 2007, following a FAS Russia's proposal, the Government of the Russian Federation adopted a decree, which reduced administrative entry barriers to air transportation market (quotas for air transportation and licensing of some routes), which opened the way to competition between air carriers. "Today up to 6-8 air carriers can operate the same line. Competition forced them to reduce transportation costs, and maintain and increase the volume of transportation, which has enabled the airlines to incur less losses overcoming the crisis", said Anatoly Golomolzin, Deputy
Head of FAS Russia.

With removal of administrative barriers, new technological and economic barriers have emerged, associated to the work of airport operators (refueling companies and aviation companies, combining airport and air transportation activities).

Two general problems of air transportation market are of particular urgency and importance: access of air carriers to the airport services, including services provided by refueling companies; and the costs of aviation fuel.

Analysis of the cases, initiated by FAS Russia against the entities providing airport services, shows that any air carrier can be very vulnerable. In June 2009 only upon petitions from "Aeroflot - Russian Airlines" OJSC, the Federal Antimonopoly Service initiated proceedings against organizations providing services for supplying aviation fuel in the airports of Anapa, Krasnodar, Kaliningrad, Mineralnie Vody, Krasnoyarsk and Khabarovsk. FAS Russia found that "Anapa Airport" OJSC, "Kreditinvest" CJSC (Mineralnie Vody), "Krasnidar International Airport" OJSC, and "Avianeft" CJSC (Kaliningrad) violated the antimonopoly legislation because they refused to accept fuel for storage from air carriers in the amount necessary for their operations. Cases against "Sibir'AviaService" CJSC (Krasnoyarsk) and "Khabarovsk Airport" OJSC are under investigation.

In autumn 2008, FAS Russia investigated cases, initiated upon petitions of "UTAir" "Siberian Airlines", Centre-Avia", Interavia" and found that "Koltsovo Airport" OJSC, "KD AVIA" OJSC (Kaliningrad), "Saratov Airlines" OJSC and "Yakutsk" Airport" State Unitary Enterprise violated the antimonopoly legislation. Grounds for opening proceedings: the airports refused to enter into contracts for providing services to airlines or refused to provide convenient slots for an air carrier. Therefore, the issue of access to airport services is important for all air carriers, regardless of the company's size and routes; although for smaller companies the problem might be even more pressing.

The antimonopoly bodies pay close attention to another problem: the cost of aviation fuel. Only in 2008 FAS Russia and its regional offices initiated around 70 cases related to violations of the antimonopoly legislation in the markets of aviation kerosene. As a result, FAS Russia imposed fines for the amount more than 5.6 billion Rubles. On 17th February 2009, FAS Russia again initiated proceedings against the following oil companies - "LUKOIL" OJSC, "TNK-BP Holding" OJSC, "Gazprom Neft" OJSC and "Rosneft" Oil Company" OJSC for violating Part 1 Article 10 of the Federal Law "On Protecting of Competition" (in particular, for creating discriminatory conditions in January-February and May-June 2009). Upon investigating the cases, FAS Russia found that "TNK-BP Holding" OJSC and "Gazprom Neft" OJSC violated the antimonopoly legislation. Cases against "LUKOIL" OJSC and "Rosneft" Oil Company" OJSC are under investigation.

To overcome the crisis in aviation fuel supply, the Government of the Russian Federation proposed several measures, including transition to payment for aviation fuel using the price formulae in direct supply contracts; trading air fuel through exchange and electronic exchange; and completing separation of aviation companies into a separate airport and an air carrier. Approving the "Rules for Access to the Services of Natural Monopolies" is an important systemic measure, in line with the above proposals.

"The decree adopted by the Government of the Russian Federation is aimed at increasing transparency of relations between airports and aviation companies. Its objective is to protect the interests of both market participants (airport operators, air carriers, fueling companies) and consumers of their services, first of all, air passengers. Removing barriers in the market of air transportation and airport services, and developing competition will enable better demand satisfaction for diverse quality services, new convenient routes for the passengers and reduction of transportation costs. For instance, with a new carrier (UTAir Airlines) on the Moscow - Mineralnie Vody route), the air fare on this route is reduced by a 1.5 factor, while customers now have a possibility to choose an air carrier", emphasized Anatoly Golomolzin.

At the moment FAS Russia is making enquiries to aviation companies and the authorized government agencies in order to inspect whether the existing tariff policy of Russian aviation companies, that has multiple rates and different conditions, and sale and return schemes for air tickets are justified.

Individuals possessing relevant information are encouraged to forward it to the Federal Antimonopoly Service.