The EU is insisting that Russia waive a right to collect royalties for flights of international airlines over its territory that are worth about $200 million per year

Monday, June 17, 2019

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Though the EU has announced a mutually acceptable decision has been reached, the Russian Transport Ministry has not confirmed it so far. The royalty story dates back to 1970, Gazeta reminds its readers, when the Soviet leadership allowed foreign carriers to refuel in Moscow before flying over Siberia if they paid compensation to the national carrier Aeroflot. The foreigners had to agree because the only alternative to Siberia overflight was an eight-hour haul over the North Pole. However, Western carriers later started operating new long-haul jets that did not need to refuel in Moscow. Non-stop flights over Russia undermined Aeroflot's standing on the market, and the government changed the compensation terms, demanding royalties irrespective of whether the flight landed in Russia. The European Union says royalties do not correspond to Russia's free-market commitments and has warned that this might cause problems with its accession to WTO. Although Benita Ferrero-Waldner, the EU Commissioner for External Affairs, said yesterday that Europe and Russia had found a solution that satisfied both sides, the Russian Transport Ministry has said Russia will collect the royalties until 2013, with some of the money, which until now had gone to Aeroflot, going on upgrading Russia's air traffic control system. Aeroflot's deputy general director, Lev Koshlyakov, has described the EU urges as political blackmail that could give Europe a unilateral advantage. Significantly, he says, EU representatives do not even have a mandate authorizing them to negotiate the matter, which could only be put on the table after 2013. Russia's Federal Agency for Air Transport has confirmed that the royalty issue was not critical to the country's accession to WTO, while he issue of opening the Russian skies to foreign carriers is highly important for the EU but still unresolved, and might remain as such for years to come

Print The EU is insisting that Russia waive a right to collect royalties for flights of international airlines over its territory that are worth about $200 million per year

Bookmark The EU is insisting that Russia waive a right to collect royalties for flights of international airlines over its territory that are worth about $200 million per year