Flight Ban Infuriates Local Airline

KIEV, Ukraine -- The German embassy in Kyiv has locked horns with a regional Ukrainian airline over time slots for flights between the two countries, resulting in flight bans, reports of lost revenues and a low brow PR campaign against Germany’s government and major air carrier.

Three obscure Ukrainian public organizations have staged small protests in the capital to defend domestic airlines, which they claim are being squeezed out of the country’s air transportation market by German aviation giant Lufthansa.

The Association for the Defense of Ukrainian Citizens’ Rights, the Public Committee for the National Security of Ukraine, and the Private Investments Protection Association, which could only be contacted by telephone numbers listed on press releases, held an Aug. 3 protest in front of Lufthansa’s Kyiv office and an Aug. 9 rally in front of the German Embassy in Ukraine.

Protest participants accused Lufthansa and Germany’s aviation authorities of unfairly banning flights to Germany by Dniproavia, a 100 percent state-owned airline based in Dnipropetrovsk, in what the Ukrainian organizations have called an aggressive expansion into Ukraine’s air space.

The organizations, none of which have their own websites, said the publicly traded German air line was creating a crisis for Ukrainian airlines flying to Germany.

One of the protesting Ukrainian organizations, the Private Investments Protection Association, is listed as a contact on Dniproavia’s English-language press releases.

According to the German embassy in Ukraine, the German authorities banned the flights in response to Dniproavia’s limitation of Lufthansa flights out of state-owned Dnipropetrovsk International Airport.

The German Federal Office of Civil Aviation (LBA) banned Dniproavia from flying to Germany on March 8 this year.

Prior to the ban, the Ukrainian airline had operated two flights a week to both Frankfurt and Berlin from Dnipropetrovsk.

The protesting organizations also named other Ukrainian airlines that have been allegedly discriminated against by Germany’s aviation authorities, including Donbassaero, UM-Air and Aerosvit.

In a statement released to the press, Aerosvit, a major privately controlled Ukrainian airline in terms of fleet size and number of routes, has denied the claims made by the Private Investments Protection Association on its behalf.

According to an English-language press release issued by Dniproavia and the Private Investments Protection Association on Aug. 1, Dniprovia filed a lawsuit the same day with the Economic Court of Dnipropetrovsk Region against Ukraine’s State Service for Aviation Security Supervision, accusing the Service “of limiting competition in favor of the foreign air carrier Deutsche Lufthansa AG.”

The state service told the Post that they consider the matter bilateral and have not gotten involved in any capacity.

Another press release dated Aug. 4 states that Dniproavia “has filed a protest against the controversial ruling by the LBA prohibiting the company [Dniproavia] to operate on all of its Ukrainian-German routes.”

The release said LBA’s ban was based on “inaccurate allegations by Lufthansa, accusing Dniproavia and [local] Ukrainian aviation authorities of blocking Lufthansa’s Ukrainian flights.”

The Aug. 4 press release further states that Dniproavia demands the immediate cancellation of LBA’s ban, and reserves the right to initiate litigation.

The German Embassy in Ukraine announced in an Aug. 11 statement that the aviation authorities of Ukraine and Germany had signed a bilateral protocol on Feb. 22, 2005 which “significantly liberalized” air transportation between the two countries.

According to the German Embassy, the protocol gives both sides equal rights to overnight stops for all of their flights, and stipulates that all secondary routes such as those from Dnipropetrovsk could be flown by either side seven times a week.

The embassy said that in contravention of the protocol, Lufthansa was denied its right to fly the Frankfurt-Dnipropetrovsk route with overnight stops six times a week, and that numerous rounds of talks between Ukrainian and German aviation authorities held between November 2005 and the start of March 2006 failed to resolve the issue.

The German embassy said that, on Feb. 19 2006, the Ukrainian authorities banned Lufthansa from flying to Dnipropetrovsk altogether, and that the decision by German authorities to ban Dniprovia flights to Frankfurt and Berlin was a “retaliatory measure against Dniproavia, which interferes with competitors by abusing its double position as a carrier and airport operator.”

Dniproavia first deputy general director Serhiy Tkachenko told the Post that the conflict between Lufthansa and Dniproavia was the result of failed negotiations, which ended early in March.

Tkachenko said that Lufthansa was granted five of the six time slots a week that it had requested and was asked to choose another departure time for the sixth slot so that it was not in conflict with an existing Dniproavia flight.

Negotiations with Lufthansa led nowhere, Tkachenko said, adding that Lufthansa currently has permission to fly to Dnipropetrovsk five times a week at their requested times, and could make a sixth flight on condition that Lufthansa’s departure to Frankfurt follow Dniproavia’s flight for the day in question.

Tkachenko said that Dniproavia offered Lufthansa an alternate time slot, but that the German side categorically refused the offer.

He added that if the situation is not resolved by the end of 2006, Dniproavia would lose up to Hr 8 million ($1.6 million) in revenues for the year. According to Tkachenko, Dniproavia has estimated that its Frankfurt route alone amounted to nearly one-third of its total annual revenues as of November 2005, when arguments over Lufthansa’s flight to Dnipropetrovsk began.

Lufthansa declined the Post’s request for comments.

Source: Kyiv Post