Ukraine and USA Agree to Open Skies Regime

An official signing ceremony for the deal took place at the US Department of State on July 14, 2015 with Under Secretary for Economic Growth, Energy, and the Environment Catherine A Novelli joining Ukrainian Infrastructure Minister Andriy Pyvovarsky in signing the formal Open Skies agreement.

A new liberal open skies air service agreement has been reached between Ukraine and the United States of America and progress continues to establishing a similar arrangement with the European Union to support the development of the Eastern European country’s economy and its integration into global aviation community.

An official signing ceremony for the deal took place at the US Department of State on July 14, 2015 with Under Secretary for Economic Growth, Energy, and the Environment Catherine A Novelli joining Ukrainian Infrastructure Minister Andriy Pyvovarsky in signing the formal Open Skies agreement.

“This agreement is a tangible example of the strong bonds of friendship and cooperation between the United States and Ukraine. It strengthens our bilateral economic ties and facilitates the growth of civil aviation between our two countries,” said Ms Novelli at the signing ceremony.

A study released by the Brookings Institution this March estimated that US Open Skies agreements have generated at least $4 billion in annual gains to both American and foreign travellers. These agreements have also produced countless new cultural links worldwide.

“Open Skies agreements work because they eliminate government interference in the commercial decisions of air carriers about routes, capacity, and pricing: this allows carriers to provide more affordable, convenient, and efficient air service,” said Ms Novelli.

“By allowing air carriers unlimited access to partner countries, Open Skies agreements also provide flexibility for alliance partners while supporting high standards for aviation safety and security,” she added.

The US has now reached Open Skies agreements with more than 115 partners from every region of the world, although, as is the case currently with its agreements with United Arab Emirates (UAE) and Qatar, not all the deals have been fully supported by its own airlines.

“Over two decades, these agreements have vastly expanded passenger and cargo flights to and from the United States, promoted increased travel and trade, enhanced productivity, and spurred high-quality job opportunities and economic growth for both the United States and our foreign partners,” added Ms Novelli.

The agreement has been welcomed by Ukraine’s leading carrier, Ukraine International Airlines, which has expressed confidence that the agreement`s conclusion and entry into legal force will fuel aviation development since it allows more scope and freedom when choosing routes, aircraft types, frequencies, ticket fares and operation models.

As the only Ukrainian carrier that is currently operating non-stop scheduled flights connecting Ukraine and the USA, Ukraine International Airlines said it intends to “seize the new opportunities” to extend its route network in the US. The airline currently offers flights between Kiev and New York.

“Deregulation of the Ukraine – US aviation market is in line with the latest global trends,” said Yuri Miroshnikov, president, Ukraine International Airlines. “We are confident this step will boost competition allowing not only ourselves but other carriers – both Ukrainian and North American – to take advantage of the agreement and plan their operations and business more efficiently.”

For Ukraine to rebound from what was a difficult 2014 following conflict in the East of the country and the alleged shooting down of a Malaysia Airlines Boeing 777 in its airspace, it needs to take a wider Open Skies viewpoint rather than seeking to protect its national assets, Yevgen Treskunov, strategic development and international relations committee at the Airports Association of Ukraine (AAUCA) explained during the recent Routes Silk Road forum in Tbilisi, Georgia.

After a period of strong growth and stability in the local market, Treskunov said the country had been “hit hard” by the events of last year and it is now having to work hard to stimulate the Economy. “Business traffic is suffering, but there remains a strong potential for inbound tourism. We have the infrastructure following the investment associated with us co-hosting the European Football Championships in 2012. We just need to bring capacity and stimulate demand,” he said.

Ukraine is a huge market opportunity, but for many carriers there have been notable restrictions on air access. Negotiations on a full EU-Ukraine open skies agreement had reached a critical stage over the past couple of years, but have fallen on a more regional structure. This has initially seen the Ukraine Infrastructure Ministry allow the western Ukrainian city of Lviv to be linked directly to European Union destinations without any restrictions as a trial run, and more recently the Odessa market has been opened too.

The agreement on the establishment of a Common Aviation Area between Ukraine and the European Union was initialled in Vilnius, Lithuania in November 2013. It was scheduled for signing in March 2014, but has yet not been signed. The reason for the delay in signing is a failure to agree the positions of Spain and the United Kingdom on the dispute over sovereignty over the territory in which the Gibraltar airport is situated.

According to Ukraine International Airline boss, Yuri Miroshnikov, this is “the only impediment” to the agreement coming to fruition and that “there are no barriers” on the part of Ukraine. “We expect the European Union to commence the procedure as soon as possible,” he said, adding that deregulation of air traffic between Ukraine and the East is also of critical importance.

“Gaining access to the overregulated eastern markets is essential for further development of our country’s transit potential. It will allow gradually opening the eastern aviation markets and expanding flight opportunities between Europe and Asia,” said Mr Miroshnikov.

Ukraine International Airlines regards deregulation of air traffic between Ukraine and the EU to be "overwhelmingly important" to Ukraine's integration into the global aviation community and it is making its own efforts to push through the agreement by writing to the European Commission requesting it accelerates the process to formalise a Common Aviation Area Agreement.

In a formal letter to Jean-Claude Juncker, president, European Commission, the airline said: " We are concerned with the fact that the Agreement on Common Aviation Area between Ukraine and the European Union is still not concluded.  As the leading Ukrainian carrier, Ukraine International Airlines asks the European Commission to make a strong contribution to accelerate the process and commence as soon as possible the conclusion procedure for the Common Aviation Area Agreement."