Cross-polar routes may be subject to controversial fee increases (364 words)

Published: 2/12/2001

Scrambling to boost its over-flight revenues, Russia may soon hike air navigation charges for foreign airlines using its airspace, according to GSGA report sources. The recent route developments in Siberia and the Arctic region require huge investments to maintain and upgrade air traffic control facilities. These sources say that the current level of the system revenues barely suffices to finance the projects stipulated by the federal modernization programme and to pay air traffic controllers` salaries. The new Cross-polar routes, opened for regular operations as of 1st Feb, are apparently not covered by the earlier modernization plans and therefore in need of additional financing to the tune of almost $37m. The talks with EBRD, over a possible sovereign loan, were put on hold by the European Union last year - due to Russia's refusal to revise the rogue compensatory payment system, established by Aeroflot on Trans-Siberian routes. Last fall, GSGA turned to Japan's Sumitomo in an attempt to secure a commercial credit facility. Despite Sumitomo's general consent to lend necessary funds, Russia still needs to reallocate a considerable part of its ATC revenues to service the debt. This is considered to be hardly feasible under the projected lack of the modernization budget. The earlier reports indicated that Transport Deputy Minister, Pavel Rozhkov, was lobbying for a 30% increase in charges for Cross-polar routes only, in exchange for cancelling appropriations of part of royalty revenues from Aeroflot to the ATC system. These plans, however, were turned down by the ATC decision-makers, who predicted a considerable loss of interest in Cross-polar routes, on the part of foreign carriers if such an increase were to take place. Instead, the current plan calls for a revision of chargeable weight categories, so shifting the burden of payments from heavy aircraft operators to light- and medium-weight planes. Ultimately, such adjustment of weight categories is predicted to raise the annual level of ATC revenues by 10 - 15 %. Existing charge rates vs. maximum take-off weight categories MTOW (tonnes) < 50 $ 39.00 51-100 $ 53.00 101-200 $ 66.00 201-300 $ 68.00 301-400 $ 70.00 > 401 $ 72.00

Article ID: 2349