OREANDA-NEWS. May 28, 2014. Ukraine International Airlines reckon that Ukraine`s national currency devaluation and 50% US dollar rates increase, that occurred within the period of February – March 2014, are the key reasons for domestic ticket fares boost.

A substantial part of the carriers` expenses is calculated in US dollars regardless of the route – either domestic or international. Notably, aircraft lease rates, jet fuel costs, territory overflight taxes and surcharges, and airport fees are paid in US dollars. Even the mandatory fee for each passenger of domestic flights that goes to the State Treasury Ukraine (50 US cents) is also US dollar-pegged. Moreover, in global distributing systems all ticket rates (including rates on domestic carriage services) are also indicated in US dollars. Passengers pay for tickets in UAH at the interbank currency rate valid on the day of payment. Accordingly, plummeting of US dollar exchange rate caused ticket fares rise in UAH.

According to the Association of European Airlines, which Ukraine International Airlines joined in 2008, the average ticket fares for UIA domestic services are 9% lower than average ticket fares for European carriers` flights within Europe.

UIA has repeatedly raised the issue of the necessity to create conditions for domestic flights` cost-cutting at all levels of Ukraine`s transport authorities. UIA reckons that substantial domestic flights cost-cutting can be achieved only in case the following conditions are fulfilled:

Costs are equitably reallocated among all entities of the air carriage supply chain;

Profitability levels of monopolists (i.e. airports, handling and catering providers, fuel and flight navigation services` suppliers, etc) are reasonably restrained;

De facto purchasing power of the population is increased and, consequently, effective domestic air transportation mass market is created.

“With its 22-year long history of operations under the conditions of severe competition on both domestic and international aviation markets, UIA makes every effort to maintain its domestic route network, – noted Evgeniya Satska, UIA Corporate Press Secretary. – We confirm that regardless of highly challenging political and business environment, Ukraine International Airlines fully comply with the company`s obligations to the domestic flights` passengers”.