Ukraine's largest air carrier, Ukraine International Airlines, must repay its debts to a special fund that finances state aviation expenses.
This follows from a ruling by the Kyiv District Administrative Court, the text of which is posted in the Unified State Register of Court Decisions. The amount UIA is required to pay is not specified in the document. However, according to the Ministry of Infrastructure, as of October 8, 2014, the airline's debt to the special fund amounted to UAH 24,8 million, which is 97,9% of the total debt of all carriers, Kapital reports.
This isn't the only lawsuit challenging UIA's debts. Specifically, the Kyiv Oblast Prosecutor's Office and Boryspil Airport are demanding that the carrier pay over UAH 200 million in outstanding debt for ground handling services.
According to Aerojet CEO Anatoly Mazurenko, the airline transfers $2 per departing passenger into a special fund. "The fund has existed since the 1990s and has always been a lifeline for the State Aviation Service," he notes, adding that the State Aviation Service uses the funds to cover its own expenses, meaning it doesn't require funding from the state budget.
UIA filed a lawsuit with the Kyiv District Administrative Court on August 1. The company demanded that the State Aviation Service's assessment of the tax levy for the special fund from September 2013 to May 2014, as well as the invoices issued from late December 2013 to June 2014, be declared unlawful. UIA argued that the collection of funds was not provided for by the Tax Code, and the amount of such a contribution was not specified by law, according to the court ruling. However, the court turned a deaf ear to these arguments and rejected the carrier's request. UIA corporate press secretary Evgeniya Satskaya reported that the airline had filed an appeal, which had been accepted for review. "We stand by our position and refrain from commenting on matters that are pending legal proceedings," she said.
Filing an appeal will allow UIA to delay its contributions to the special fund, according to Andrey Guk, senior lawyer at the law firm Marchenko Danevych. "Winter is the low season, so most flights are unprofitable," explains aviation market expert Evgeny Khainatsky. He notes that during this period, funds are often insufficient even to cover operating expenses.
The special fund pays our country's membership fees to the International Civil Aviation Organization (ICAO), says Guk. If Ukraine fails to do so because of UIA's debts, the country may have difficulty defending its position in the dispute with Russia over control of Crimean airspace. "UIA constantly appeals to its status as the national carrier. In my opinion, this behavior by the airline does it no credit and also constitutes a failure to comply with the operator's license conditions," Guk complains, adding that the District Administrative Court's decision is justified. Anthony Philbin, head of communications at ICAO, said that it would be better to contact the State Aviation Service regarding Ukraine's possible debt to the organization. The regulator was unable to comment on the publication's request for comment.
If UIA continues to accumulate or fail to pay its debts, the State Aviation Service has the right to ban its flights, Mazurenko believes. For example, the regulator may refuse to approve the next seasonal schedule, which begins in late March. Such examples are well-known. "More than ten years ago, when agreeing on a schedule, the mandatory repayment of the debt to the fund was stipulated," recalls Mazurenko, who previously headed an Odesa-based airline. According to him, the State Aviation Service could theoretically request funds from the state budget for its needs. However, there is no money in the treasury for additional expenses.
Based on: Capital
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