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25 January

The Antimonopoly Committee Binds Boryspil Airport to Make Operation of Ground Handling Service Commercially Separated

On January 24, 2017 there was the final meeting of the Antimonopoly Committee of Ukraine which studied a number of issues related to ground handling service operation of Boryspil International Airport State Enterprise in the case No. 36-26.13 / 27-14 at the request of the handling companies. The following issues have been considered by the Antimonopoly Committee: the amount and explicability of the airport infrastructure charge, delaying of Interavia ground handling services certificate approval procedure and the features of the monopoly entity regarding the provision of specialized ground handling services by the own ground handling structural subdivision of the airport.

Following the case proceedings the Antimonopoly Committee imposed a fine of USD 12,780,354 on Boryspil International Airport State Enterprise. Whereas, under the law the formal decision will be published within 10 days, Boryspil Airport considers it necessary to present its own position, formed during the case hearing.

When considering the justification of the airport infrastructure charge it is required to proceed from the fact that as of today there is no single rate methodology approved by the Authorized Agency. In the meantime, the Antimonopoly Committee assumes Boryspil Airport infrastructure charge computation according to its own methods not legally justified. In this regard, as soon as the official decision is issued, the management of Boryspil International Airport State Enterprise will initiate the request to the Ministry of Infrastructure of Ukraine and the State Aviation Authority on the necessity to develop the appropriate standards.

As several times stressed, the previous airport management practiced the policy of confrontation with their counterparts which in 2013 resulted in delays of the Interavia ground handling services certification, and accordingly, in the imposition of a fine by the Antimonopoly Committee.

Under the legislation, the status of a monopoly company is defined by its market share exceeding 50%. Meanwhile, ground handling services at Boryspil Airport are rendered by four private entities and the ratio of the airport ground handling subdivision reaches only 20%. Therefore, the management of Boryspil International Airport State Enterprise believes the approach of the Antimonopoly Committee in terms of its recognition the airport ground handling service monopoly features to be unreasonable. Since 2014, the airport has been implementing the measures to optimize the operation of ground handling service through a gradual staff reduction and the processes optimization. However, the decision of the Antimonopoly Committee keeps up to date the issue of the urgent restructuring of the airport ground handling service making it commercially separated with its own commercial account including the prohibition of subsidies.

"We would like to draw attention to the fact that Boryspil Airport is ready to hold a dialogue with all market service providers. We are planning to evolutionarily transfer non-core activities to the market, but significant changes are impossible due to the absence of common rules, including on ground handling services at airports. We urge the State Aviation Authority of Ukraine to take the appropriate document soon taking into consideration the views of key market players. The further delay in regards to settlement of rules for "the game" is unacceptable ", said Yevhenii Dykhne.

After Boryspil International Airport State Enterprise receives the official decision of the Antimonopoly Committee on case No. 136-26.13/27-14, the airport management will initiate the consideration of the issues in dispute regarding the fine computation and the amount reasonability within the established economic court proceedings.

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