OREANDA-NEWS. August 30, 2011. At the Round Table about “Controversial Issues in the Work of Antimonopoly Bodies of Russia and Ukraine and the Avenues for Resolving Them” experts of the two competition authorities discussed the state of competition on the air transportation markets in the Russian Federation, reported the press-centre of FAS Russia.

Deputy Head of the Federal Antimonopoly Service (FAS Russia) Anatoly Golomolzin reported that FAS had analysed 65,000 air fares on 3160 air routes, operated by 91 air carriers. Investigating the market, experts established that when an additional company appears on the market it reduced the air fares on average by 28.5%, two companies –by 32%, and three – by 39%. If a company exits a route it can lead to significant increase of the air fare.

In the field of airport services, the lowest rates are observed in large airports with passenger traffic exceeding 300,000 passengers, while small airports (from 1000 to 10,000 passengers annually) show the highest rates. The main item of expenses for the air carriers still remain aviation fuel and lubrication materials and aviation fuel supplies. The costs of refuelling and the costs of kerosine differ between large and small airports by approximately 1.5 times, passenger taxes – by 1.9 times, terminal charges - by 2.4 times.

The main violations on the market of air transportation in the Russian Federation that are registered annually by experts of the Antimonopoly Service are abusing market dominance and concerted actions.

In 2009-2010 FAS initiated 63 cases against air carriers, airports and other organisations providing airport services:

- fixing excessive rates for passenger air transportation rates, preventing airlines’ entry to the air transportation market;

- violating pricing procedures (preventing entry of air carriers and aviation fuel suppliers to the market of storage of own fuel in airports, fixing unreasonably high prices for the services of supplying fuel and lubrication materials).

To prevent abusing market dominance by airports, in July 2009 the Government of the Russian Federation approved the Rules for non-discriminatory access to the services of the holders of natural monopolies in airports. The Rules, as well as practice of the antimonopoly bodies in the field of air transportation are aimed at preventing violations of the antimonopoly law by the holders of natural monopolies in airports, including refusals to provide services to airlines, particularly, aviation fuel storage, refuelling services, equal conditions of rendering services to consumers.

To improve the situation on the market of air transportation and airport services, FAS proposes a package of measures:

- Creating conditions for airports acting as business-units focused on increasing the volume and enhancing the quality of services (differentiating airport services),

- Making sure that alternative service providers are present in airports,

- Creating conditions for attracting investments in large airports – on the basis of public-private partnerships,

- Changing the system of government tariff regulation.

In line with the above, FAS has already prepared a draft law on amendments to the Law “On Natural Monopolies”, which, in particular, proposes expanding the methods of tariff regulation.