Customs treaty should ease bizav headaches in Russia

 - February 24, 2011, 6:15 AM

Russia, and the former Soviet republics surrounding it, remains a massive land of opportunity for business aviation. At the same time, for Westerners at least, much of this opportunity seems to remain blocked by a web of mystifying and frustrating bureaucracy that can make it practically impossible to operate business aircraft cost-effectively.

This situation is getting better and is set to improve further, Leonid Koshelev, chairman of the Russian United Business Aviation Association (RUBAA), told the EBAA Forum in Vienna in January. He explained that the root cause of many frustrations over things such as lengthy delays importing spare parts has been the fact that Russiaπs customs regulations have been fundamentally at odds with those in the West. Through Russiaπs connection to neighboring states such as Belarus and Kazakhstan these issues have been even more widespread.

But Koshelev expects this situation to change now that the Russian government is poised to sign up to the Istanbul Convention on customs requirements, which should make its rules more compatible with those in the West and thus more user-friendly to aircraft operators. “Foreign-registered aircraft would be exempt from customs formalities and so would the related importing of spare parts for maintenance,” he explained.

RUBAA has been lobbying hard on the customs issue, which it says has been getting much worse in terms of the way Russiaπs rules have been applied to Western-registered aircraft over the past five years. It expects to see positive changes by the middle of this year, following Russiaπs signing of the convention.

Haphazard Enforcement of Charter Regulations

At the same time, RUBAA believes the West is far from blameless in the uneven and disjointed relationship between the Russian industry and its counterparts in the West. Koshelev argued that impractical delays (of at least three days) for Russian operators seeking permits to fly westbound charters leave many feeling they have little option but to bend the rules. “This is why people abuse private flight rules, and if Europe made it easier [to operate legally under commercial rules] it would help the situation,” he told EBAA delegates.

Conversely, Western operators who are able to dodge the aforementioned customs issues remain relatively free to operate charters into and within Russia. But this isn’t without risk, according to Caspar Einem, whose Austria-based Jet Alliance last year formed a Russian charter subsidiary called Jet Alliance East in partnership with a division of the state-owned airline, Aeroflot.

Legally, Western operators have no more automatic right to conduct cabotage operations within Russia than Russians do in the West. In practice, Einem explained, Russian authorities are turning a blind eye to these operations. “But the authorities there have this up their sleeves as a reason to kick you out,” he said. “The authorities know [operators are flying charters without permits], and it really isn’t advisable to do this.”

Czech Republic-based operator ABS Jets is flying increasing numbers of charters into Russia. Its head of operations, Jan Kralik, told the EBAA Forum that getting permission for these flights can take as little as two or three hours. However, he cautioned: “This can vary a lot depending on who [among the Russian officials processing applications] is on duty.”

Kralik pointed out that he can have bigger problems when a Germany-based client wants to be flown from Germany into Russia, with the ABS aircraft needing first to position from the Czech Republic. Despite the fact that both countries are in the European Union, German authorities insist on first finding out whether German operators object to a Czech operator providing the flight, and this can cause serious enough delays that ABS exercises its right to operate the flight under private rules since the client owns the aircraft concerned.

Unworkable Requirements

Ken Koort, president and CEO of Estonian charter operator AS Panaviatic, painted a vivid picture of how Russian customs rules continue to conspire against business aircraft operations. One of his aircraft recently got stuck in the Russian city of Perm with a burst tire. So convoluted are the import rules for spares like this that the company found the only practical solution was to covertly fly in a replacement tire on another of its jets from its headquarters in Tallinn and to fly in a mechanic on a commercial flight from Moscow.

Another of Koort’s frustrations with operating conditions in Estoniaπs giant neighbor is the continuing requirement for foreign aircraft to hire, at considerable expense, a Russian “escort navigator” for flights within Russia. The official reason for this requirement is that Russian air traffic controllers cannot be expected to converse in English. But what Koort finds especially vexing about this arrangement is that, first, many of his pilots actually speak Russian and, second, in practice the “escort navigators” do no actual work during the flight.

Kralik of ABS Jets confirmed the impression that the “escort navigator” requirement amounts to little more than a thinly veiled excuse for Russian officials to collect unofficial remuneration. “Make sure you pay the invoice for the escort navigator regardless of whether or not he is on the aircraft,” he cautioned.

According to RUBAA, there are now more than 352 business jets registered in Russia and surrounding Eastern European states. Russia alone accounts for just over one third of the total, with 125 aircraft, and there are 44 in the Ukraine and 31 in oil-rich Kazakhstan. Eastern Europe still accounts for just 12 percent of Europe’s overall business aircraft fleet but, according to EBAA chairman Rodolfo Baviera, it has enormous potential for growth. Traffic levels in Russia and Eastern Europe increased by 10 percent last year, Baviera noted, from 83,000 departures in 2009 to 93,111 last year. Business aviation movements in the Moscow area alone climbed by 11 percent in 2010, to 22,800–having dropped by 24 percent in 2009 from a peak of just over 25,000 in 2008.