6 Oct 2022 12:08

Russian airlines could see aerial navigation fees jump 60% in Nov, 10% in April 2023

MOSCOW. Oct 6 (Interfax) - Fees for aerial navigation services for Russian airlines could surge by 60% as of November 1, a draft Federal Antimonopoly Service (FAS) order posted on the regulation.gov.ru website indicated.

The rate increase is planned for both domestic and international flights, as well as for services around airfields.

All fees for foreign airlines will be raised by 40% in November, according to the order.

The new rates would be in effect until the end of March 2023, and on April 1 they would go up another 10% for both Russian and foreign airlines.

The last time a rate increase was approved was in December 2021, when the fees went up by 5-10%.

The provider of aerial navigation services in Russia is the State Air Traffic Management Corporate (State ATM Corporation), which answers to the Federal Air Transport Agency. The company has been having financial troubles since 2020, when the Covid-19 pandemic dramatically reduced the number of foreign airlines' flights through Russian airspace. Services for these flights have historically generated most of the company's revenue.

The situation was exacerbated by the imposition of sanctions against Russia after the start of the military operation in Ukraine, as a number of foreign airlines stopped flying to Russia. Despite optimizing costs, the company will use up its cash reserves by the fourth quarter of 2022, the Transport Ministry warned. It estimated the shortfall at 25 billion rubles.

In August, the ministry tabled a draft government resolution to support State ATM Corporation by providing subsidies, further optimizing the size of the company's workforce, without laying off air traffic controllers, as well as raising fees for airlines as of November 1, but only by 30%.

Under a government order dated September 15, 15 billion rubles will be allocated to support State ATM Corporation. If needed, the company might receive additional funding before the end of this year, clarifications on the document said. The draft state budget for the next three years said that the company could receive 10 billion rubles in 2023 as support amid sanctions.