Budget carriers are looking at closer to the Ukrainian market. Domestic companies is the time to take decisive action to avoid being ousted from the market.

good news for the Ukrainian passengers: flights to Europe can be cheaper next year. Economy offer is likely to come from budget carriers: in Europe it has become incredibly close (even without considering the consequences of the crisis the European air transport market expected to drop 10-15% in the next few years), and because they are looking for new markets. Ukrainian airlines should prepare for tough competition, especially in the segment of international traffic.

are falling all

While traditional carriers are suffering huge losses and cutting routes, their budget counterparts making plans for expansion. International Air Transport Association (IATA) forecasts: in 2009 the first passenger flow at low-cost-of companies will grow by 17%, while the rest of the market participants it will fall by 12-14%. And the European state employees are tipped as the best indicators that, in general, is easily explained. Network of routes in the Old World - the densest in the world, making low-cost-the company can implement the main principle of its work: while the plane is flying, he earns while standing - it spends.

But no matter how rosy the existence of low-cost companies in Europe, in itself, the European air transport market will shrink in coming years. This is indicated by all the European experts - estimates vary only in the extent of its reduction. That is why even successful state employees to look for new markets. Naturally, they will go where there has been steady growth in air traffic. In the first place - the Middle East, where up to 2009 are expected to increase passenger traffic by 13%, and Eastern Europe.

Although the rate of decline in the former socialist bloc, as well as in Ukraine, comparable to western Europe, but low-cost-companies find it promising for several reasons. First, the Ukrainian airports close to the hubs of European low-cost-of companies. Secondly, the Ukrainian market - nizkokonkurentny. Thirdly, it is in transit towards Europe - Middle East. But out on the Middle East market is the most interesting for the European budget companies.

This budget users are able to offer passengers even more low fares on those areas where there is stable demand. Namely - on routes to Europe. Even small losses in the first low-cost-the company may well survive in order to stake out their place in the Ukrainian market.

This year we reduced the map flights to Ukraine, but we continue to believe the Ukrainian market outlook - said Natalya Kazmer, member of the Board of Directors Wizz Air Ukraine. - Already this year, opening a trip to Venice, as in Our plans remain open flights to Bergamo, Eindhoven and Charleroi.

about his plans to enter the Ukrainian market of state and other low-cost-of the company. German Air Berlin and Germanwings are going to bind Ukraine to Germany, Danube Wings - a flight to Slovakia, and FlyDubai - to become the second budget carrier to fly from Ukraine to the Middle East.

In other words, budget-aware of all risks of the Ukrainian market of air transportation. But ready to wrestle with the Ukrainian flagship on areas where ridership has steadily increased since the end of the crisis.

Counting airplanes

For domestic companies, this means that they need to change strategy to survive in the Ukrainian market. First, to reduce costs by operating activities for which you want to update the park, in order to reduce the share of fuel costs in the cost of flights. For example, a Wizz Air in the fuel accounts for 30% of the costs, whereas the Ukrainian airlines, this figure rises to 45-50%. UIA has already leased a new Boeing 737-800, bringing its fleet of aircraft to 18 years. In this case all the machines operated by Ukraine International Airlines - Boeing 737 that various modifications, which reduces the cost of servicing fleet.

Already, in many positions of operational activities, we may well compete with budget companies - says Yuri Miroshnikov, president of JSC International Airlines of Ukraine. - Upgrading fleet will allow us to become more competitive. And, despite the crisis, I think that this year we will finish with a profit.

Secondly, the Ukrainian carrier must also pay attention to new markets. And the most promising areas - Russia and CIS countries. Typically, this market each of the Ukrainian companies thrust itself alone, seeing another Ukrainian company competitor. But starting this year, Aerosvit and began to co-operate WINDROSE flight Kiev - Astana. Such cooperation of Ukrainian companies are possible in the future. In Russia the market of budget transport is not very developed, and for the Ukrainian companies will be place on it.

Redistribution of Ukrainian air transportation market is inevitable, but domestic companies in a stock is about seven to eight months, for which they are quite capable of reconstructing their work. And the chances of survival depend largely on how they take advantage of this pause.

Alexander Davydov: Foreign companies are ready to take control of three-four airports in Ukraine

Increase BitTorrent strategic airports (in cities with million-as well as Lviv and Simferopol) - one of the key factors determining the prospects for Ukrainian companies in the market of passenger air transportation. Analyzing the possible redistribution of air travel market, The Power of Money agreed to discuss two topics with the head of State Aviation Administration of Ukraine Alexander Davydov.

you are a supporter of the return of airports in the state ownership. However, the Economic Court of Zaporozhye region is considering a bankruptcy case Berdyansk Airport, one of the four that remained in state property. You do not think that this is precisely the assessment of the effectiveness of public airports?

- No, I do not think. Berdyansk Airport was established on the basis of the military airfield. And contain a long runway is expensive - and, not being able to in time of crisis to ensure arrival of aircraft in Berdyansk, it would be wrong to spend money for the maintenance of the airport.

Why do you think that it is a return to state ownership to help revive the airports?

- Local authorities do not have the resources to maintain the strategic airports at a level demanded by international agreements signed by Ukraine.

But, for example, for the reconstruction of Zaporozhye airport requires 550 million UAH. and this is only one airport, and a total of about 30. Where does the state take the money?

- We have a concept (Concept of the state target program of development of airports for the period up to 2020), in which the state has committed itself to the technical content of airfields. In this budget money will be spent. And the airports themselves in the future will be managed by companies with relevant experience. This will be done on the basis of the auction so that the entire infrastructure of the airport - passenger terminal, cargo warehouses and fuel storage - could be in private ownership. Now we plan to implement this scheme on the example of the airport Lvov, where the auction winner will receive an airport in management for 30 years, for their own funds to build the terminal and all other infrastructure.

amount of necessary investments have been calculated?

- We believe in the Lions' total investment in the first two years will be about $ 120-140 million, and over 30 years, this amount would be around $ 700 million

Which companies participate in the tender?

- I can now reveal the names of applicants, as filing ends only on October 8 (the conversation took place on 6 October). And on Nov. 4 will be named the winner.

well, but we are talking about strategic airports. What to say then of those airports that currently do not fulfill their direct functions? You're a supporter of that all they need to save …

- Every civilian airport for some reason was intended. These airports can not do without state subsidies. ¬ And this in the future we are considering the possibility of establishing a fund, which will transfer the money from the activities of profitable airports. The fund will be financed regional airports.

Is a private investor, who took control of the airport and put money into it, agree to send a stream of income to the fund for the maintenance of unprofitable airports?

- Any major airport attracts ridership of small. After all, in the same Donetsk supposed to fly a transit passenger from Mariupol, Lugansk, Zaporozhye, in order to then transfer to a long haul flight.

But the airline reduced the number of flights on domestic flights …

- We now have a drop in domestic shipments by 12%. This is a crisis phenomenon is common across the world of aviation. But the crisis is over, and here come the airline with planes, which are designed for a small number of passengers. Right now, for example, the market comes to airline UTair, which will fly on small planes ATR. We expect that they will show how you can work and earn money on domestic flights.

Several low-cost-of companies planning to enter the Ukrainian market, why (except for Wizz Air and Air Arabia) all the way faith and limited?

- The massive arrival of low-cost companies on the Ukrainian market will happen after the introduction of our agreement with Europe on a common airspace.

On signing this contract it is every year, but when it comes into force?

- In November we have scheduled for the fourth round of talks with the EU. In fact, the only point on which we have to agree - the period during which phases will be introduced in the terms of this contract.

And what is this period?

- I think three or four years. We hope that by that time in Ukraine airports already be in the hands of fund managers. And investors, who invested in the airport, hundreds of millions of dollars, will do everything to go fly airplanes.

But all this can be done now?

- Yes, but I do not see any activity among the current leaders of the airports. They do not go and knock at the door heads of airlines, inviting them to fly to him. Now airports are managed by former head ZhEKov and utilities. When in their place come the powerful company with ties to the major carriers, they will find a way to attract airlines: whether flexible rate charges, whether additional conditions (the basing of aircraft, maintenance, etc.). Is management of airports in Zurich and Vienna, they manage several airports in the world. And they are ready today to take control of three-four airports in Ukraine under the investment obligations. Why not give them that opportunity?

After the entry into force of the common airspace pressures of foreign carriers in the Ukrainian companies will increase. What action they should take?

- We have always tried to protect our airlines from competition, thereby not giving an incentive for development. They felt that the State Aviation Administration has a roof, and have the opportunity to fly with a full load at high prices. Under such circumstances, the Ukrainian airline received suits them profits and virtually no development. As a result, they have this old Navy - a Boeing 737-300, which has even out of production. Airbus-s we have two cars - a Donbassaero and Wizz Air, but for the Ukrainian market they need at least 20. Now, the state puts on the sale of state stakes in the UIA, and in АероСвіÑ‚і. And as soon as an agreement on a common airspace, it will be a kind of signal for European investors, that is an urgent need to invest in Ukraine.

Do I understand correctly, that the State's desire to sell their stakes in the UIA and АероСвіÑ‚і associated with the desire to attract foreign investors?

-Yes, in times of crisis, we need to find the source of funding and support these companies.

However, the State's desire to sell his share in the same АероСвіÑ‚і has already resulted in a scandal, for 22,39% of shares were valued at 17 million UAH. Already have a statement Dniproavia that they are ready to offer ten times the price.

- At one time the British government sold the debt was of great British Airways for £ 1. So for me, more important is not it, how many will be sold to the public package, but rather the buyer is willing to invest in the development of the company.

problem АероСвіÑ‚у is this: it is the only carrier in the country, carrying out costly long-haul transport. For $ 500-600 you can fly to the U.S., but for $ 400 - in Central Europe. But for the carrier's cost flights to Prague is 40-50 thousand euros, and in America - 200-250 thousand euros. Naturally, the payback for U.S. flights to be a complete load of aircraft. And this is possible with a developed network of short international routes. But the most lucrative market in Western Europe from Ukraine flies UIA, which with АероСвіÑ‚ом few contacts. So when the crisis began and fell from the passenger traffic of North America, АероСвіÑ‚у did not have its network to fill this fall. Because the company has reduced passenger traffic by 25%. Would they have a network of short routes, the fall would be comparable to rates Lufthansa (5-6%). For example, the UIA have reached the level of incidence of 8-9%, and the year, I think they will finish with a profit.

What, in your opinion, should be after this development strategy of Ukrainian airlines?

- Here, let's see: as in time of crisis behave UIA and Aerosvit? If in 2007-2008. average ticket price at the UIA was $ 220, then today is about$ 170. MAU now beginning work on the principle of the carrier's low budget: cut spending, reduce ticket prices. So he began to do and Aerosvit. This is normal when a company adapts to the market. And so we soon hope to see lower prices for air travel. And Ukrainian airports geographically favorably located, they may well serve as hubs (transit airports) on the way from America and Europe to Asia. We expect that in the near future in our market will come Arabian company, a subsidiary of Emirates plans to start flights to Kiev. And as soon as the Boryspil buden the new terminal, we get a hub in Ukraine, which would chip away part of the flows from Russia.

Obektivka

Davydov, Alexander, was born May 3, 1963 in Aktobe (Kazakhstan).

In 1984 he graduated from flying school Aktobe higher civil aviation.

1984-1996 gg. - Dnipropetrovsk United Air Squadron, 2 nd pilot of the Yak-40.

1996-1996 gg. - JSC PFK Unified Energy Systems of Ukraine, Director of the aviation department.

1996-2000 gg. - LLC Airline UES-Avia, General Director.

2000-2001 gg. - OJSC Airline Dniproavia, and. About. Heads of government.

2001-2002 gg. - Ministry of Transport and Communications, the Assistant Minister.

2002-2003 gg. - OJSC Airline Airlines of Ukraine , the head of government.

2005-2006 gg. - State Service of Ukraine on supervision of aviation security, the first deputy head.

Since 2006 - Kiev city council member.

Since 2008 - Ministry of Transport and Communications, Deputy Minister, Head of the State Aviation Administration.

Alexander Vlasenko

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