Okulov: This summit has been postponed several times because Europeans have set a number of preliminary terms. We believed that we need to start a dialogue without any preliminary clauses and solve the existing problems in cooperation. We did not try to mask or take off such questions from the agenda; the most critical problems have been included in the summit’s agenda instead. And all the proposals of EU have also been included in it along with problematic issues of our party.

From the EU’s side these are issues regarding conclusion of horizontal agreement, calling off the national attribute for the European airlines, the question connected with the usage of Trans-Siberian routes, etc. For us these are questions connected with EU’s directive about greenhouse gases emissions trading in civil aviation, issues on flight safety and aviation security. The proposal regarding mutual acceptance of aircraft’s type certificates is also very significant part of the agenda.

Cancellation of national attribute for European airlines. During our preparation for the summit we have agreed with our Finnish colleagues that we will prepare and sign an additional protocol to the agreement of air transportation, which assumes the cancellation of national attribute of a carrier from the EU’s side on this destination. Thus, flights from Finland to Russia may be performed by non-resident of Finland. The case is the national attribute of European carriers has been changed. You know that, for example, Austrian Airlines, Swiss are currently owned by German Lufthansa, which is not the resident of Austria or Switzerland, but these are appointed carriers for the Russian destination. That is why we have decided to cancel this old norm keeping two main functions for the aviation administration of the country: it will be responsible for control of flight safety provision and control of standards, implemented by the airlines, and control of meeting the requirements of ICAO standards. Such protocol has been concluded with Finland and we will conclude similar protocols with the aviation administrations of other European countries. Most of the countries will sign such agreements during a period of one year.

The question of unification of flight safety regulations. If we have our own requirements and Europe will have different ones than we will not be able to provide a similar level of flight safety and protection from terroristic threats. We believe that we need to form a unified approach to these requirements based on compromise between provision of safety and keeping the attractiveness of air transport for the passengers. It is clear that the procedures connected with passing all the searches do not make the aviation attractive. And we are interested in simplifying these procedures and decreasing the time spent at the airport by the passengers. There are state-of-the-art technologies for provision of aviation safety, but they are costly. The important question for us is how to implement these technologies without shifting these significant costs to the airports and airlines. The question of anti-terroristic safety should be solved by the state bodies.

Program of flight safety provision is connected with the unification of ramp checking regulations (SAFA) aimed at forming a single system of requirements to the aircraft and qualification of crew in Munich, Tolmachevo, Kurumoch, etc. And also the inspectors, carrying out the checking, should work using united checklist. For these purposes we have prepared an inspector training program. The training will include two stages: at first we will send our tutors from the Academy of Civil Aviation to Europe in order to receive proper training and after that they will train the inspectors.

Regarding mutual acceptance of type certificates. The certification of European aircraft in Russia is carried out by the Interstate Aviation Committee (IAC). And it is a costly procedure. We understand that the certification costs of the Western companies are becoming part of the aircraft’s price for the Russian airlines. And our aircraft industry also needs to acquire the similar regime in the area of airworthiness certificate acceptance in EU as American, Brazilian, Canadian airframers have in Europe.

About the climate doctrine of EU, which will come into effect from January 1st 2012. It assumes the greenhouse gases emissions trading and imposes additional costs on our airlines, which perform flights to Europe. Russia does not only declare the necessity of decreasing greenhouse gases emissions, but also moves in this direction. It is hard to imagine other variants where such results as in Russia have been achieved during a short period of time. The fleet renewal of our airlines gives a sensible result. The replacement of Tu-154 by Airbus or Boeing aircraft reduces the emission two times. In addition the noise footprint is also reducing significantly. We have increased the scope of transportation by 40% during the last six years, but the emission level has not changed. The whole Russian aviation industry is consuming less kerosene than in 2007 in spite of continued growth of traffic. The airlines have invested great funds in fleet renewal and it is very illogical to punish them with additional fees. Surely we need to stimulate airlines to reduce emissions, but the stimulation of this kind is not necessary at all, because life makes the airlines acquire new more environmental-friendly aircraft.

We are also transferring to cut concept of separation in the upper air-space since November 17th. We are transferring from 600 to 300 meters of vertical separation, thus increasing the capacity of air space two times. As for ecology, it allows captains choose the most optimal echelon with the minimum fuel consumption rate, less flight time and minimum wind effect. In general it helps decrease the emissions. At the same time we are implementing new approach patterns and departing from the airfield schemes, which are optimal in questions of time and fuel consumption.

Another argument regarding the ecological issue is connected with the fact that air masses in Europe are moving from West to East. Thus, all the emission is moving from Europe to Russia. That is why Russia is a casualty from the ecological point of view, not Europe. And it is not clear why do we have to pay European officials.

The second echelon includes questions such as: how will they use funds, obtained from the airlines? The funding is intended for ecological programs defined by the European Commission. And the main program is aimed at decreasing the emission of greenhouse gases in aviation – development of new European engines and aircraft. Some part will be allocated for different ecological programs. And a significant share of these funds will be used to maintain an enormous bureaucratic apparatus, which will be managing the emissions trading. It makes no commercial or common sense for our passengers to finance European aircraft industry.

The meeting of aviation administrations of countries outside EU has taken place in Delhi on September 30th. India, China, USA, UAE, Saudi Arabia, Russia, Brazil, Chile and others have formed the joint resolution against the implementation of one-sided separate measures by Europe.

Note by AEX.RU: The European program for emissions trading assumes monitoring of the amount of emissions during several years and then defining a personal quote for every airline. In other words, the recorded number of emissions for the specific airline is considered as 100%. Every airline will have the right of performing flights without paying for emissions within 85% of its quote since January 1st 2013. The rest 15% should be bought from EU (assuming it maintains the number of flights). According to the experts’ assessments, Russian airlines will pay Europeans $20-25 million in 2012. And this figure will only increase in future, because even if they keep the same scope of transportation, the free quota will decrease.

- Valery Mikhailoich, as far as I can see, every airline will have its own personal quote? But the European market is enormous and stagnating, while our market is rising from a crouch start. So it seems like the quotas are aimed at repression of traffic growth and our airlines find themselves in less profitable situation than the European ones?

- You are right. Any quoting is aimed at cutting the traffic. There is a program of reseating Europeans on railway transport. According to their calculations, such a quotation will limit the growth of air transportation. You are right saying that our paces are incommensurable with the European ones. We have recorded a phenomenal growth of traffic last year - about 30%, and the European traffic has increased only by 17%. And this growth has an enormous potential. We can see that the share of international transportation is increasing. It was about 40% of the total scope of traffic, and this year it will likely reach 42%. The growth has been provided by Turkey and Egypt earlier and now the vector is moving in the direction of Europe.

- There is an opinion in the industry that Ministry of Transport is taking it lying down and the question of airlines’ national attribute may have been used as a token money in trading with Europeans.
- Of course we have studied the possibility of, as you say, trading with EU on all the issues. We will not benefit from such trading. We would look quite stupid instead. The Austrian Airlines has already been performing flights to Russia for two years despite non-resident of Austria being the majority shareholder. And we are prolonging the temporary permission. The aviation business is restructuring very quickly, it is just present reality. And it is quite stupid to take a tough stance pretending not to see this. It is also illogical to prohibit Austrian’s flights because of majority shareholder being non-resident of Austria. Our main claim is implementation of ICAO standards and flight safety requirements.

As for some kind of trading in exchange for denial of quotes trading...This will not be exchanged. It has been fixed by the European Parliament as a law. And our counteractions are possible in several directions:
- Production before European court and obtaining of judicial decision, which will help the Europeans exit from this dead end preserving their face by cancelling of law or making changes in it. Several American companies have chosen this way. But hearing of the case is a long process and the prospects of its completion in the nearest future are rather cloudy.
- The accepting of law in Russia banning Russian airlines from paying for acquisition of quotes.  US Congress has used this way and consideration of such draft law has already been started. It is also a hard way. It may lead to limitation of flights of Russian airlines to Europe.
- Acting through ICAO – accepting the resolution in cooperation of other countries’ aviation administrations.

- Have you considered the possibility of similar steps from the Russian Federation’s side? For example, Europeans will stop paying so-called “transit money” to Russia. Maybe there is some sense in replacing these payments by ecological fees, because such flights are also hurting Russian ecology? Are we ready for such kind of hard negotiations?
- We have elaborated this variant. But then we understood that the European Parliament is anticipating this move. Once this step is made, they will obtain the capability of challenging at in court. And the court will support them because such limitations could not be implemented only for European companies (it is contradicting the principles of WTO). Thus, if we implement the ecological fee, we will punish our national airlines too. And we will punish not only those airlines, which perform flights to Europe, but also the ones that fly to other countries and inside Russia.
On this account, the best way is implementation of statutory bar on acquisition of European quotes for our airlines with simultaneous adopting of ICAO resolution, which will declare the unacceptability of such separate decision. This problem will be considered on the next session of ICAO in November.

- By the way, please explain, what is the connection between cancellation of “transit money” and Russia’s WTO accession?
- A document called “Agreed principles” has been signed in 2006. The procedure of cancellation of payments for using Trans-Siberian routes is specified in it. Procedure of entry into effect of these agreed principles is as follows: European Commission accepts it on the part of Europe and our government – on the part of Russian Federation. Text of the principles has already been approved. Government of Russian Federation decided not to make any changes in the existing regulations until Russia enters WTO. There is only one mismatched question – when will the principles come into effect: whether it will do so after the working group on WTO accession will report about finishing all the negotiations (Europeans offer this variant) or after the official initiation of Russia in WTO during another general assembly, as we offer.

Note from AEX.RU:  European program of emissions trading refers to all the airlines, which perform flights with landing in Europe, above Europe without landing, flights departing from Europe and domestic flights inside Europe. The payment is time-based, moreover, airlines have to pay not only for European flight section, but for the whole route (even if a jet was performing flight from Australia and crossed a lot of borders, the airline will have to pay for the full time of flight from the airport of departure).This requirement refers to all the airlines except those which accomplish less than 1% of total European traffic.

-Then maybe we should join the ecological program of EU and have a right of our share in the collected fees at least for the section of flight, which is taking place above Russia?
- The whole ideological and political construct of this directive is aimed at joining of other countries. The main argument of Europeans – ICAO is ineffective for solving ecological problems. And we are offering the real market mechanism so you should join us.
But we should move in another direction. First of all, contribution of aviation in greenhouse gases emission is less than 2%. Secondly – all the technological changes in aviation show that no other industry reduces emissions with such fast paces as aviation does. This problem is being solved by creation of new aircraft with better aerodynamic performance, more fuel-efficient and greener engines, implementation of new types of fuel. We are achieving good results moving in this direction.
 

- Valery Mikhailovich, if I have not misunderstood you, we have only one path left for us - confrontation. And what is next, another standoff and battle of nerves?
- The war has already begun. At present it has the character of confrontation between aviation administrations. But the aggravation is surely in store. And the situation around this directive is very dangerous. They will simply open Pandora’s Box and the most undesirable scenario is implementation of similar separate measures by other aviation administrations.

- How much time do we have for taking countermeasures?
We should do it by the end of this year. A group of deputies is ready to present such bill in Duma. Simultaneously we are harmonizing the text of ICAO resolution.

-We know how “quickly” Duma considers documents. You may run behind schedule.
- We must be in time! Our objective as aviation authorities is to protect our airlines.