Higher fees on airline companies to refurbish airports will not lead to big increase in ticket prices - Russian transport minister

MOSCOW. July 22 (Interfax) - An increase in air navigation service fees on airline companies, to finance the refurbishment of regional airports, will not lead to a big increase in ticket prices, and the matter has not been decided yet, Russian Transport Minister Roman Starovoit said.

"This issue is under discussion, no decision has been made yet," Starovoit said in response to a question posed by Interfax on Saturday ".

"If it [the increase] does happen, that will be an insignificant sum," Starovoit said.

The government is forming a national project called "An Efficient Transport System" and a budget for its implementation, he said.

"So, together with the Finance Ministry, with the Russian government, we are trying to identify potential sources to make as much as possible in the framework of that project. The infrastructure [of regional airports] really needs renovating. And given our budget deficit, we are considering various [funding] sources for this project, including this [raising air navigation fees)," he said.

"No final decision has been made, estimates are underway, and this will be evident once a budget draft is formed by the government before being submitted to the State Duma," Starovoit said.

At present, Russia has 228 airports (the figure is expected to increase to 242 by 2030) and 116 of them need modernizing, the Transport Ministry said earlier. Among big airports, 75 are scheduled for reconstruction, including through a Public Private Partnership mechanism (the federal government has allocated around 250 billion rubles). Among airports with low passenger flows, 51 are scheduled for refurbishment. For fund all this work, the government wants to set up a fund that would be filled from extra-budgetary sources. Each year the fund would accumulate 10 billion rubles through a special air navigation service fee on airline companies, a source familiar with the matter told Interfax earlier. Eventually the carriers' expenses would be passed on to passengers, for whom the cost of transportation would increase approximately by 50-100 rubles, the sources said.

The average air navigation fee for Russian airlines would increase by 150 rubles, the Federal Air Transport Agency's (Rosaviatsia) chief Dmitry Yadrov said. This could happen starting from August this year, once the relevant law is passed. Each year, the fund would receive 10-12 billion rubles, he said. The first airport to be funded with this money is in Cheboksary.

The air navigation service in Russia is operated by a Rosaviatsia enterprise called FGUP Goskorporatsiya Po Organizatsii Vozdushnogo Dvizheniya. The fee rates are approved by the Federal Antimonopoly Service, depending on an aircraft's maximum take-off mass (MTOM) and the itinerary of its flight (within or from Russia). There is a separate fee for airport service. For example, for a Russian carrier, the fee for aircraft on domestic flights was approved in 2022 at 150.1 rubles for MTOM of up to 2 tonnes per 100km of orthodromic distance; 1,105 rubles for MTOM of 50-100 tonnes; and 1,538 rubles for over 400 tonnes.