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Signing of the Open Skies Agreement Will Stimulate the Entry of New Airlines into Ukrainian Market

Date of publication: 19 July 2018

Yevheniia Makarenko, Lawyer

Source: UNIAN

The Ukrainian governmental authorities have recently mentioned the forthcoming signing of the Common Aviation Area Agreement between Ukraine and the European Union (the Open Skies Agreement). It should be noted that last year the participants of the 5th Eastern Partnership Summit informed about signing of the Open Skies Agreement between Ukraine and the European Union, but the date thereof was repeatedly postponed. Moreover, the Agreement was initialed in 2013, but has not yet entered into force.

The formal setback thereto was the territorial dispute between Britain and Spain. The UK’s exit from the EU may remove the issue, but this means that signing may be postponed at least until the Brexit process is finally completed.

What is the Open Skies Agreement, what difficulties may arise when implementing the provisions of this Agreement, and why is it important for Ukraine to sign this document?

The European Common Aviation Area is a bilateral agreement between the EU and third countries that establishes the common safety standards allowing for more efficient and safer use of aviation area. The objective of creating the European Common Aviation Area with third countries is the gradual liberalization of the aviation market and harmonization of civil aviation legislation.

Back in 2015 the National Security and Defense Council of Ukraine adopted Resolution “On Measures to Protect Ukraine’s National Interests in the Field of Aviation”, one provision of which envisages an urgent approval of the preparation measures plan for further implementation of the Common Aviation Area of Ukraine with the European Union and its Member States, including, in particular, measures to harmonize the

Ukrainian legislation with the EU legislation in the air transport field.

The EU-Ukraine Association Agreement clearly provides for the conclusion of a Common Aviation Area Agreement.

Among other things, signing of the agreement allows to refuse bilateral regulation of air transportation between the countries, as well as to remove restrictions on a number of flights between different points within a single aviation area. As a result of such signing Ukraine will increase its passenger traffic and number of destinations. At the same time, the inflow of tourists and foreign currency will increase, which will ensure additional revenues to the state budget.

However, we should not forget that Ukrainian airlines may not be able to withstand the price competition with European low-cost airlines which may enter the Ukrainian market.

The recognition by the EU Member States of certificates issued by Ukraine regarding aircraft crews and air traffic management may be beneficial to Ukraine as well.

The Common Aviation Area Agreement provides for the incorporation into Ukrainian legislation of more than 60 EU regulations and directives. For example, Moldova, after signing such an agreement, should implement more than 86 EU provisions and adopt more than 70 normative acts. One of the obstacles to the effective implementation of the Agreement’s provisions into Ukrainian legislation may be the lack of resources currently at disposition of the relevant government agencies to incorporate the proper provisions.

After the relevant regulatory acts are implemented, the Ukrainian air carriers will be able to obtain unlimited rights for transportation from Ukraine to the EU and between the EU Member States, provided that their stand is in Ukraine. In turn, the EU air carriers will be able to obtain unlimited commercial rights for flights from the EU to Ukraine and within Ukraine.

According to the context of the Agreement, this document creates equal and uniform conditions for market access for all Union air carriers, and establishes new arrangements for regulatory co-operation and convergence between the European Union and Ukraine in fields essential for the safe, secure, and efficient operation of air services. It is noteworthy that this makes it possible to extend the provisions of the Agreement to other Member States by applying the same rules without discrimination and benefiting all Union air carriers regardless of their nationality. The air carriers will be able to operate freely from any point in the European Union to any point in Ukraine.

For Ukrainian citizens the Open Skies Agreement is advantageous, first of all, by lower air transportation prices and their increased availability.

The signing of the Open Skies Agreement will stimulate the entry of new airlines into our market, including the low-cost carriers. This, in turn, will increase competition and struggle between the airlines for profitable destinations.

The Open Skies Agreement will enter into full force approximately six months after its signing. This period is required for the document ratification by the parliaments of all interested states. This means that our national airlines have time to prepare for open competition with their western counterparts, and our airports have the opportunity to work out more favorable conditions.