The question of receipt of royalties by the Russian airlines for flights on Trans-Siberian routes is a barrier for fair competition

On 27^th of March of this year the leading Kazakh airline company "Air Astana" is going to open a new regular direct flight "Astana - Ulaanbaatar" within the framework of the execution of the Plan of the Nation - 100 concrete steps to the implementation of five institutional reforms in the field of development and introduction of new international travel routes.

In this case, the flights from Astana to Ulaanbaatar, the Kazakh side, in view of the geographical location of Kazakhstan, will have to fly about 300 km through the airspace of a neighboring country (the Russian Federation).

It is worth mentioning that according to a bilateral agreement between Kazakhstan and Russia, the parties have the right to fly across the territory of the other Contracting Party without landing.

At the same time, the Russian side demands from "Air Astana" a royalty payment (payment for use of the Russian air space), for use of the Trans-Siberian routes (TSR). At the same time, as it was noted by the Kazakh air carrier, by the definition of ICAO (International Civil Aviation Organization), the airways, used for carrying out flights from Kazakhstan to Mongolia, China and South Korea are not included in the system of TSR.

In turn, the Kazakh side, in accordance with the provisions of bilateral international agreements between Kazakhstan and Russia does not put any restrictions associated with the flyover of the Russian side, over the airspace of Kazakhstan to third countries, these flights are referred to the Trans-Asian direction.

"NCE has repeatedly stressed that the demands for royalties by the Russian airlines for flights over the Trans-Siberian routes is a barrier to fair competition. It should be understood that non-governmental support, which our Russian colleagues get, disadvantages Kazakhstani Airlines and distorts fair competition", - said the acting Deputy Chairman of NCE RK Dana Zhunusova.

According to the statistics presented by the Kazakh carrier regarding the use of the airspace by Russian airlines in Kazakhstan and Kazakh carriers using the Russian airspace, there is a significant difference in favor of Russian airlines. So, Russian airlines make about 640 flights through the airspace of Kazakhstan each week, while Kazakhstan's airlines make not more than 25 flights over the Russian territory each week.

It should be noted that the Russian side puts barter requirements for the royalty payment from the Kazakh side over the route "Astana - Ulaanbaatar", thus, putting the Kazakh side in an unprofitable and in an unequal situation that violates the economic parity of the parties.

So, one of the requirements is the provision of seats to the Russian carrier, under the commercial agreement with the leading Russian airline "Aeroflot - Russian Airlines", which gets royalty payments from foreign carriers for the use of SCI Systems.

Dana Zhunusova recalled that this issue was raised during the 18th meeting of the Intergovernmental commission on cooperation between Kazakhstan and the Russian Federation on 11^th of February this year. However, despite the agreements reached with our Russian colleagues on presentation of information about the legal basis and the conditions for the use of TSR by Kazakhstani air carriers, no decision has been found yet.

Moreover, during the negotiation process, the Russian side stated the requirement to provide in return for gratuitous use of the Russian airspace by the new air route, the additional traffic rights on existing routes: "Moscow - Astana" and "Moscow - Almaty", in regard to the right to appoint another Russian carrier and to increase the frequency of flights ( In accordance with part 2 of the international agreement on air communication between the Governments of Kazakhstan and Russia, each party appoints one airline and flight number).

"It should be understood that the transport sector and, in particular, the sphere of civil aviation, is a particularly sensitive sector of Kazakhstan's economy. The domestic business is also disturbed by the Resolution of the Government of the Russian Federation, which was adopted at the beginning of March this year (on March 7, 2016 number 171) regarding reimbursement of ticket fares from the federal budget only for the purchase of tickets of Russian airlines or airlines of other Member States of EAEU", - said Dana Zhunusova

According to NCE, the Resolution scares our business because it may set up a preference to Russian airlines rather than the airlines of other Member States of the Eurasian Union, through the purchase of tickets from the Russian airlines as a priority, which are reimbursed from the federal budget.

"In the conditions of deepening integration processes based on partnership between Kazakhstan and Russia, the Kazakh business community hopes for a positive resolution of these issues without creation of additional barriers to bilateral friendly economic relations", - said Acting Deputy Chairman of the Board D. Zhunusova.