8-Apr-2011 11:23 AM

Russia may admit foreign airlines to domestic market

Russia's economic policy committee of the State Duma, the lower house of Russia's parliament, submitted a bill intended to amend the legislation on competition and natural monopolies in Russia to limit the maximum share of any airline on the domestic market to 25% (RIA Novosti/Kommersant, 07-Apr-2011). The amendments to the legislation may be approved by the Duma by the end of 2011. There are currently no local airlines in Russia with a domestic market share of more than 25%. The largest carrier in the market, Aeroflot, accounts for around 15% of domestic market share. However, the carrier has claimed the bill in its current form may jeopardise the company's plans to become a global Russian airline. "These amendments, after Russia's accession to the World Trade Organisation, will not allow Aeroflot to compete with the world's other largest airlines," the carrier said. The committee also reportedly instructed the Federal Anti-Monopoly Service to work out common air ticket pricing criteria for all airlines and admit foreign companies to the domestic market, if the demand for air tickets exceeds supply. The Service stated it is not against the bill but added that it had not taken any part in its development. It also said that the country's regulatory base had to be improved to resolve the problem of prices on domestic services.

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