Licensing air carriages, assigning quotas and ensuring non-discriminatory access to the services in airport facilities

№ 397 Resolution of the Government of the Russian Federation of 23.06.2007 «On Licensing carriage of passengers and goods by air, and on improving state regulation of air carriers» incorporates FAS Russia's proposals on abolishing the requirements that tie up licensees to a particular airport or route, which have long restrained competition of air carriers of the routes.



The main obstacle for competition development on domestic air transportation market is restricting the access of companies to routes and assigning routes quotas as well as tying up the quotes for profitable routes to mandatory flights on loss-making but socially important routes. FAS Russia repeatedly requested Rosaviation [The Federal Agency of Air Transport] to terminate violations of the antimonopoly legislations - assigning quotes for the number of flights by air carriers on specific routes.



The draft Transport Strategy of Russia also incorporated the provision for reviewing the regulatory and legal framework to stop assigning quotes on domestic routes. Quota system will cover only international routes on parity basis in accordance with bilateral interstate agreements for international carriage.



To ensure non-discriminatory access of airlines to the airport infrastructure FAS Russia deems it expedient to:



а) Separate the airport and carriage activities, since a united airline/airport company, trying to escape competitors, usually refuses to sign the airport service agreements or offers extremely inconvenient slots (time intervals between aircraft arrivals and departures). Foreign experience, however, proves efficiency of the auction procedures for slot allocation to the airlines in independent airports;



b) Ensure non-discriminatory access to the services of economic entities that operate as natural monopolies; the procedures ensuring non-discriminatory access to the airport services will be established by the Non-Discriminatory Access Regulations, that are currently being developed pursuant to the №135-FZ Federal Law «On Protection of Competition» and will cover all natural monopolies including airport services;



c) Simultaneously to non-discriminatory access to the airport services as natural monopolies, it is important to develop competition in potentially competitive areas of airport operations: aircraft refueling and technical maintenance, luggage handling, ramp services, cargo and mail handling, catering services, duty-free, car parking, etc. International practice shows that there should be at least two providers of the above services; and at least one of suppliers must not be directly or indirectly managed by the airport authorities or an airport operator that transports over 25% of passengers or goods registered in the airport. Moreover, airlines should be given self-maintenance possibilities in the above service fields;



d) Endeavour to create competing refueling facilities in the airports. Until competitive suppliers of aviation fuel are available, it is important to secure non-discriminatory access of customers to refueling services, giving the airlines possibility to use refueling facilities for storing their own fuel and offer full set of services on refueling their own aircrafts. The refueling facilities access procedures will also be established in the Non-Discriminatory Access Regulations.