The European Commission urged Russia to cancel trans-Siberian payments from airlines

Russia should stop charging foreign airlines for using the skies over Siberia. This statement was made on January 16 by the head of the Directorate General for Transport of the European Commission (EC), Henrik Hololei, at the Airline Economics conference in Dublin.

According to the official, this should be done when restrictions on flying over Russian territory are lifted for Western companies. “If one day we have the opportunity to see the opening of Russian airspace, one thing should disappear – Trans-Siberian royalties,” Hololei said (quoted by Reuters), noting that any opening of Russian airspace “would not be something ordinary.”

The Ministry of Transport of the Russian Federation and the Federal Air Transport Agency declined to comment. Vedomosti also sent a request to Aeroflot.

Trans-Siberian payments are fees that Russia has charged foreign airlines since Soviet times for flights between Europe and Asia via Siberia. This route allows to reduce the range of intercontinental flight by 4000 km. The beneficiary of the payments is the national air carrier – “Aeroflot”, part of the amount was then transferred to the Federal Air Transport Agency, for example, to support flight schools.

Before the coronavirus pandemic, Aeroflot received, according to various estimates, $500–800 million a year for foreign airlines flying over Siberia. In the pandemic 2020, the airline lost about $250 million (Vedomosti wrote about this on October 5, 2021). Elena Sakhnova, an analyst at VTB Capital, noted then that the main payers were Air France (France) and Lufthansa (Germany).

After the start of the NWO in Ukraine, the countries of the European Union (EU) closed the airspace for Russian airlines. The same restrictions were imposed by the United States and Canada. The UK banned Aeroflot and Russian private jets from flying. In response, Russia mirrored the ban on flights by aircraft from 36 countries without special permission from the Federal Air Transport Agency or the Foreign Ministry. Thus, in 2022, trans-Siberian payments were mainly made by carriers from Southeast Asia that operated flights to Europe.

The current situation has led to the fact that the costs of airlines from unfriendly countries have increased markedly. In the fall of 2022, Bloomberg reported that the closure of Russian skies to airlines from the US and the EU led to an increase in flight times to Asia. The cost of fuel, which is the main cost item in the aviation industry, has increased significantly, the agency noted. Air France-KLM and other European carriers, as part of their flights to Japan, are forced to fly around Russia through Kazakhstan and Mongolia, which added several hours to the duration of flights. British Virgin Atlantic refused flights to Hong Kong, and the duration of the Air France flight from Paris to Tokyo reached 14 hours.

In December 2022, the head of the International Air Transport Association (IATA), William Walsh, said that the West should reconsider its views and prepare for the resumption of flights through Russian airspace. According to him, in 2023, China may ease the restrictions imposed as part of the anti-coronavirus policy, then Chinese airlines will have an advantage over British Airways.

The statement of the European Commission looks more like a threat than an appeal, which sounds ridiculous in the conditions of the closed skies due to sanctions, says Fyodor Borisov, an expert at the Institute for Transport Economics and Transport Policy at the National Research University Higher School of Economics. He recalled that both Russian and foreign airlines lose from the mutual closure of the sky, so a return to “pre-sanction” relations is beneficial for both parties. “Europe is losing even more – several billion dollars a year,” the expert estimated.

The Europeans are consistently and persistently declaring the need to abolish the “so-called royalties,” Oleg Panteleev, executive director of the Aviaport industry agency, recalled. But, according to him, most officials entered politics after the compensation payment mechanism was formed and adopted by the contracting parties, and do not remember that this is not a whim of the Russian aviation authorities, but “long-standing bilateral agreements between airlines that are designated carriers.”

Borisov also noted that large European companies used to benefit from a restrictive measure in the form of permission to fly over Siberia. For several years, the Norwegian airline asked Russia to let it into its airspace to fly to Japan, Korea and China, but did not receive permission, the expert cited an example. There is an opinion that the position of Europe has changed largely under the influence of major European carriers. “Therefore, it cannot be argued that only Russian companies were interested in this system of admission to the market,” Borisov summed up.

An important point concerns the essence of this agreement: the Soviet (and now Russian) side – the Aeroflot airline – received compensation, in fact, for not using its commercial rights in some international directions, Panteleev noted. “That is, Aeroflot could compete with foreign carriers for a passenger, but gave the opportunity to fly to foreign airlines, receiving compensation for this,” he explained.

Therefore, if Russian airlines deem it necessary to fully use their commercial rights and compete, including with European carriers, then it is quite possible that the compensation payment mechanism will be canceled by itself, the expert believes.

According to Borisov, trans-Siberian payments are really a debatable thing, at the same time, “the system is already decades old.” “It has taken shape, why would Russia just give up a billion dollars a year in the long run? Any issue can be the subject of negotiations, but it must be absolutely clear what Russia will receive in this situation in return,” Borisov emphasizes.

The imposed sanctions led, among other things, to the fact that Russian carriers lost their historical slots at European airports, Panteleev recalled. “For international transportation, convenient slots are a very expensive asset. Therefore, when the issue of resuming transportation is decided, Russian airlines will be able to abandon this mechanism only if a number of conditions are met that ensure their competitiveness,” he said. And such unfriendly actions that have been taken by the EU, including the blacklisting of Russian carriers, will indeed make future negotiations exceptionally difficult, Panteleev concluded.