An exclusive interview with Denis Kostrzhevskiy the head of the Board of Directors of Igor Sikorsky Kiev International Airport to the agency "Interfax-Ukraine"
(I part)

-    Recently, Igor Sikorsky Kiev International Airport has shown a decrease in passenger traffic compared to 2018. In particular, in October-2019 the indicator decreased by 13% and within 10 months - by 7.9%. What is the reason for that?
-    In 2019 the number of airlines operating at the airport “Kiev” decreased. As a result, the number of passengers served here has also decreased. This is a very alarming and sad trend that we have foreseen since the middle of the previous year and now we are already observing the consequences.

If we talk about the reasons, there are several. There are economic reasons (they are probably the major ones) and there are technical ones. Let’s start from the reasons of economic character.

There are two airports in Kiev, one of which is the state one. If we talk about general economic theory, the state shouldn’t be engaged in business since it is very difficult for a “small” businessman - an individual, to compete with a “big” businessman - the state. All methods of competitive activities applicable in ordinary business are naturally applicable here. The “big” businessman naturally has greater opportunities for economic impact on the competitive environment, which we observe in the form of an Order of the Ministry of Infrastructure of Ukraine, which establishes more favorable payment terms for a larger airport ... (we are talking about the Order No. 415 of June 4, 2019 “On establishment of fees for the air navigation services of aircraft in the airspace of Ukraine” – IF).

The aviation industry operates at regulated tariffs. That means that all the prices applicable for airlines such as passenger fees, security fees, take-off / landing fees are regulated and set by the Order of the Ministry of Infrastructure which is the state regulatory body for all aviation. Thus, with another document the state established a fee for passenger services and a take-off / landing fee at the state airport by 10% lower than at the airport “Kiev”. Thus, the orders of the ministry put the state airport in much more favorable economic conditions than the airport “Kiev”. Accordingly, it became much more profitable for the airlines fighting for their financial performance to fly there.
The state uses its leverage to create a non-competitive economic environment and this is the reason of decrease of the number of passengers served at the airport.
The State uses its leverage having created non-competitive economic environment and that is the reason of actual decrease of the number of passengers served at the airport. 

-    Do you have any information regarding the case that the Antimonopoly Committee of Ukraine (AMCU) began considering the anti-competitive actions of the Ministry of Infrastructure in connection with this Order?
-    There will be no news. Let me explain simply: there are two businessmen. For example, I am a businessman, I have an enterprise, a family and we live in an apartment. And there is a “big” businessman. He lives in a large house called the “state” where many people live and there are many enterprises as well. The Ministry of Infrastructure lives in a large house and the Antimonopoly Committee lives in the next apartment. Still next door-but-one lives the Tax office and thereafter the Prosecutor’s office is located. They all live in the same house. Therefore, it is naive to hope that one state authority will make any decisions to fundamentally change the rules of the game, which in the end will lead to the fact that all these state authorities will start living worse in their house.
The enterprise is a state enterprise, the AMCU is a state authority and the Ministry of Infrastructure is a state authority as well. And everything that can affect the situation is also a governmental authority. Therefore, besides the public, the media, no one can influence this situation. I am deeply convinced of this and that is why I emphasize: the state should not be engaged in business. And this, fortunately, is now declared at the level of the state and the president. I hope that the course stated in state policy, in particular, on privatization and on the state’s exit from business will be confirmed in practice. The state should deal with the distribution of taxes, creating a competitive environment for business. If it does it, then the business will develop and compete and the quality of services will increase, the prices will decrease, jobs will be created and the state will receive more taxes.

The state function is to distribute taxes: on construction of roads, bridges, infrastructure, hospitals, teacher salaries and pensions. Businessmen don’t collect taxes indeed, do they? They don’t do. So, the state shouldn’t be engaged in business.

- So do you conduct any kind of dialogue with the state?
- Oh, sure. We write to all governmental authorities.

-    And how is this process going?
-    Well, you see politics is changing. Now there is a decision taken at the governmental level on the state exit from business. If this is confirmed in practice then we will see the results in our particular case.
Yes, indeed, probably the Order of the Ministry of Infrastructure will be canceled. Yes, probably then the decision of the Antimonopoly Committee of Ukraine will be taken. Perhaps the “Borispol” airport will be transferred to concession or privatized. Perhaps then a real competitive environment will be created. Now the competitive environment is inadequate, incorrect, “twisted”. If state policy doesn’t change, then nothing will change in our particular case.

-    How are you going to develop the airport in the current conditions? What are the plans for further development?
-    First. I hope that the declared and announced state policy will be implemented. We expect the competitive environment to level out. There are quite advanced technological processes at the airport “Kiev” and a high level of service. Therefore, in a real competitive environment we are fully confident in our competitiveness.

Now we turn to technological reasons. Why is it more convenient and profitable for airlines to fly from “Borispol” from a technological point of view? The airport “Kiev” has a runway of 2,350 thousand meters. It is located in the central part of the city. Accordingly, its approach systems allow aircraft to land and take-off under certain weather conditions. For example, in the presence of very dense fog, a pilot of the aircraft sometimes makes a decision for alternate landing. That means that technologically the airport “Kiev” is significantly inferior to the technological capabilities of the airport “Borispol”. There are two runways there and they are much longer and stronger, with a higher category of automatic approach system and the aerodrome configuration technologically surpasses the similar characteristics of the airport “Kiev”. This is probably a comparable reason in importance with the economic bloc that I mentioned. If some certain airport is technologically better even under equal economic conditions, the airlines will still leave for the best airport. Airlines will overpay for the technological advantages of the airport. “Borispol” is technologically more advanced. It should be admitted.

Now let’s talk about what should be done. In order to be able to serve aircraft in any weather conditions and serve larger aircraft, the airport “Kiev” needs to upgrade its airfield category. A master plan has been developed on reconstruction of the “Kiev” aerodrome, which has five different options. Each of them implies an extension of the runway by 550 m, an improvement in characteristics of approach systems (it includes both lighting navigational aids and radio navigation). As a result of such reconstruction the airfield configuration will change.

Now Boeing 737-800 is the largest aircraft that can be serviced at our airport without restrictions and after reconstruction such types of aircraft as Airbus A321 or Boeing 737-900 will be serviced as well.

The master plan was developed by a foreign company with the huge experience in reconstruction of aerodromes. Ukrainian experts and design institutes also took part in its development and adapted this project to native norms and rules. The estimated cost of these works ranges from EUR80 to EUR100 million, depending on the decisions that will be made.

For further development of the airport it is necessary:  firstly, to allot the land needed for the runway lengthening, secondly is to find money.

- Where will you look for money?
- The aerodrome belongs to the city. If nine years ago, when we just started working, it was a completely unprofitable enterprise and money was allocated annually from the city budget for its maintenance and now it is a major tax payer and a major employer and the air gate of the capital. Currently, the “Kiev” Sikorsky airport is the second largest tax payer among municipal enterprises and thus the city is interested in its work and development.

Of course, there are those who wish to build up and close the enterprise but from the point of view of expediency and common sense, for sure, the airport should work and it will. Therefore, the city is interested in increasing, enlarging and strengthening.

The city needs to solve two problems. The first is the land allotment; the second is either the allocation of funds or fund raising. You can attract funds in different ways: you can take a loan, you can declare a tender for transfer to a concession. If the city makes the decision of transfer to a concession, for sure, the airport operating company “MASTER-AVIA” will participate in this competition. Perhaps such a decision will not be made. Then, probably, loans will be allocated. Perhaps it will be funding from the city budget. Perhaps it will be a lease with an investment obligation. We don’t know it.

It is possible to solve the issues of land allotment and fund raising only at the level of the Kiev City Council and the Kiev City State Administration. Naturally, “MASTER-AVIA” is interested in this as soon as possible because then the airport “Kiev” will increase its technological competitive qualities, abilities and will be able to compete with the airport “Borispol”. If it doesn’t happen, then after a while we will observe an even greater outflow of passengers. Because technologically “Borispol” is also developing, improving its systems, repairing the runway.

- But the decision of the Kiev authorities can be delayed ...
- Can be ... But actually it was necessary to start yesterday. Naturally, we have realized this process today. All these questions that I mentioned had been accumulating over several years. Probably, it has already been two years of the active intervention of the state in the economic sphere of the airport activity and probably in the same period (perhaps, even earlier) we began to deal with the problem of reconstruction. But, unfortunately, with those political realities which have taken place recently, it was almost impossible to perform. Now we are in negotiations with the authorities. Documents have been submitted for the allotment of additional land. That is not much – 12 hectares of land located at the runway threshold and it doesn’t belong to anyone and isn’t assigned to anyone. Documents are at the stage of reconciliation.

The quickness of this approval depends on the Kyiv City State Administration and the Kyiv City Council. They have been there for eight months now. I hope that in the near future we will get some kind of result.

Land allotment is only the first step. Then there will be development of a working draft, determination of an accurate cost sheet, an option that we will follow, and then there will be the next stage which depends entirely on the city. It concerns determination of conditions for funds attraction. We hope that a coordination meeting will be held at the level of the Kyiv City State Administration where tasks will be set, responsible individuals designated and terms determined.

- Won’t the extension of the runway bother the local citizens?
- What I said about the reconstruction of the aerodrome is an objective reality that exists regardless of whether we want it or not. If we don’t carry out the reconstruction, the airport will stop sooner or later.
Regarding the noise. In the Soviet Union the airport served more than a million passengers per year. At the same time, this million passengers flew on old Soviet types of aircraft and small ones such as the An-24 which were much noisier than the modern large Boeing. They flew more often and they produced more noise. Now the planes are of much greater capacity but the same million passengers we carry by a much smaller number of take-offs and landings. And they make less noise.

As the runway lengthens, the take-off modes (because they make noise mainly on take-off when they give full power to the engines) will take place in more gentle modes. The longer the runway the more aircraft can accelerate on the ground, the less noise it produces at take-off. Second: the longer the runway the bigger capacity of aircraft we will be able to use.

Those aircraft that are being produced now and which we expect to serve in the future have even more sparing characteristics. Now the global trend among aircraft developers is precisely aimed at the fact that engines are becoming less and less noisy. Therefore, I don’t see a problem with noise. Naturally, there will always be those dissatisfied but that is impossible to overcome. In almost all European cities aircraft take-off and land over residential areas. In Europe, the population density is generally high and it is impossible to find places where the aircraft would bypass residential buildings. As a rule, glide paths are located above residential areas.

There is also another problem – illegal building. In fact, the airport “Kiev” is 96 years old. And building restrictions near the airport have always existed. There were restrictions on height and noise. Developers, unfortunately, using mostly different illegal methods received permits for the construction of residential buildings in the area prohibited for construction of residential buildings. They built houses, sold them to people and then disappeared in fog. And people were left alone with the existing problem. Yes, they bought an apartment in a house over which fly the aircraft. But it concerns not the aircraft that began flying over the houses, but the houses built in the area where the aircraft fly.

A perfect example of this is Sofievskaya Borshchagovka (a village in the Kiev-Svyatoshinsky district of the Kiev region - IF) which lies behind the circular road. There were built quarters with flagrant violations of environmental standards in terms of noise and altitude. Because each building located in the aircraft landing area is a high-altitude obstacle. Now the prosecutor’s office must deal with these developers. People bought apartments in houses that have to be demolished. At least several floors so that this doesn’t lead to any incident.

This is a problem. But this is a problem only because the houses were built in a prohibited area for construction in violation of restrictions and not because of the aircraft noise.

- Do you plan to introduce a flight restriction at night? This has been talked about repeatedly.

- The noise standards that exist in Ukraine are quite strict. The airport “Kiev” compiled the so-called “noise and load map” in the areas adjacent to the airport. Currently, the noise existing at the airport doesn’t exceed the sanitary standards established by the Ukrainian legislation. At night the airport has few flights, up to three. Therefore, if such a need arises there won’t be a problem to limit flights at night at the airport “Kiev”. But now there is no need in it.

- Is it planned to close the airport during the repair?
- Now there are many various technologies in the world, including the reconstruction of the airport without closing it. I hope we will perform it without closing. Even if there is a need to close it, it will be for a short-term.