The new Russian Business Aviation Association (RusBAA) has confirmed that the exceptional growth the country’s emerging business aircraft sector achieved in the past few years has been quickly rolled back to 2006 traffic levels as the global downturn has gripped the Russian economy. But speaking to the press on the opening day of Moscow’s JetExpo business aviation show on October 16, RusBAA chairman Leonid Koshelev predicted that the Russian industry is primed for recovery. However, on that same day Russian Deputy Prime Minister Igor Shuvalov told Parliament that the country’s economy will not emerge from the financial crisis until 2012.
Business aircraft flights in Russia today average about 10,000 per month. On this basis, this year is expected to result in a 14-percent dip in activity compared with the 140,000 total movements seen last year. In 2007, there were 125,000 movements, a 19-percent jump on the 2006 total of 105,000 movements.
Much of this growth was driven by the high crude-oil prices at the time, which were a significant boost to the Russian economy. Today’s crude-oil price of about $70 per barrel is less than half of last year’s average of around $145.
Koshelev praised the Russian government for two measures that he said should create a springboard for business aviation recovery. The first was last year’s abolition of the 20-percent import tax for foreign-built aircraft with fewer than 50 seats. The second is a legal change made last month to allow financial institutions to retain legal ownership of an aircraft bought with credit by clients who are the legal operators. “Today, the conditions for owning a business jet in Russia are not much worse than those in Europe,” Koshelev concluded.
The reform of aircraft ownership rules should prompt Russian customers to put their aircraft on the Russian registry rather than contriving to keep the registration outside Russia to circumvent the previous restrictions. Today less than one percent of Russian-owned business jets are on the Russian registry.
Full article: Russian market expected to grow as rules relax : AIN Online.
