Date of publication: 9 November 2015
Roman Marchenko, Attorney at Law, Senior Partner
Source: Ekonomichna Pravda
On October 25, 2015 direct flights between Russia and Ukraine will be banned for a number of Russia’s airlines. Among them there are such giants as Aeroflot and Transaero (which was recently declared bankrupt). Among the reasons for introduction of such ban were unauthorized flights carried out by the mentioned companies to Crimea without permits of the State Aviation Service of Ukraine.
The decision, however, is totally substantiated from the point of Ukrainian legislation. According to the norms and provisions of international law Crimea is a territory of Ukraine. That is why Russian airlines could make their flights only on the basis of the permits granted by official Ukrainian authorities.
Starting from 2014 the State Aviation Service of Ukraine has drafted more than five thousand administrative protocols on violation of rules of flying over the peninsula’s territory and the sum of the fines imposed onto Russian companies has exceeded UAH 600 mln.
Russian airlines, however, ignored instructions and demands of the State Aviation Service of Ukraine and followed the logic of the slogan “Crimea is ours”! As a result official Ukrainian authorities were forced to introduce corresponding sanctions.
Putting it lightly introduction of sanctions sent a shockwave among the politicians of the neighboring country. It did not take long for Russian authorities to respond and introduce “mirror” sanctions in relation to five Ukrainian airlines. As a result Russian airspace was closed for five Ukrainian airlines: Ukraine International Airlines, Dneproavia, YanAir, WizzAir and MotorSich.
In all fairness it should be noted that for the Russian Federation such sanctions are of “mirroring” nature because in their set of coordinates Crimea is a part of Russia and it was Ukraine which unreasonably introduced sanctions.
It is remarkable that cross-sanctions were not applied to Utair and its Ukrainian subsidiary. Representatives of this company (being the only airline allowed to make flights) were quick to declare that they are going to increase the number of their flights between Moscow and Kyiv.
The mentioned plans did not find approval of Ukrainian Prime-Minister. At the meeting of the Government which was aired live Arseniy Yatsenyuk stated that such matters must be resolved based on reciprocity principle – like, if it all Ukrainian companies under the ban to make their flights no Russian company must be allowed to make its flights to Ukraine. Frankly speaking the reciprocity principle may have been complied as soon as Utair is a Russian Company and Utair-Ukraine is a Ukrainian resident company.
Mass media mentioned the information on sale of Utair’s subsidiary (Utair-Ukraine) to Anex Tour (a tourist operator). So, the future of air traffic between Russia and Ukraine is in the clouds.
It’s no secret that sanctions will negatively influence financial activities of Ukrainian airlines. For the recent eight months of this year the passenger flow between Kyiv and Moscow reached 800 thousand people. The biggest blow will be suffered by Ukraine International Airlines which controls the lion’s share of Ukrainian air transportation market.
The “mirrored” sanctions will also influence ordinary passengers who will have to take transit flights via Minks, Istanbul or Riga. If previously the flight from Kyiv to Moscow took a less more than an hour, now the passengers will have to spend three times more time to get there. As a result the demand for train and bus travel will increase.
Some experts were trying to put correctness of sanction measures applied by the Cabinet of Ministers into question. According to their opinion Ukraine has rather lost from the cross sanctions. Such statements are hardly correct.
It was Russia which resorted to annexation of Crimea and is actively supporting hostilities in Donbass being in fact in the state of undeclared war with our country. Russian airlines are crudely violating Ukrainian laws and Ukraine cannot follow the policy of double standards: ask other countries to introduce sanctions against the Russian Federation and abstain from introducing them itself. The decision about introduction of sanctions is correct and even overdue. Such measured should have been taken as early as in 2014.
There were declarations that certain companies may file lawsuits on reimbursement of lost profit against Russian and Ukrainian governments because of sanctions. It is, of course, possible as long as filing a claim to the court is the right of every person – be it an individual person or a legal entity – who considers his rights to be violated.
However, the claimants’ prospects in relation to the mentioned lawsuits against Ukraine are quite vague. The matter is that while imposing sanctions Ukraine has fulfilled all necessary legal formalities: drafted protocols on violation of aviation rules, issued decisions of corresponding competent state authorities etc. Russian companies will have hard time proving unlawfulness of measures undertaken by Ukrainian authorities. In the same way no Ukrainian airline will be able to recover any losses in Russian courts.
It appears that airlines of both countries will have to adjust to the decision made by their countries, abstain from resorting to courts and wait for lifting the sanctions.