Russia Sees Big Profit in Cross-Polar Air Routes

Russia Sees Big Profit in Cross-Polar Air Routes

Russia is about to bring North America and Southeast Asia closer together ≈ and
it could earn over a quarter of a billion dollars over the next decade doing so.

After a two-year demonstration program, Russia on Feb. 1 will officially open
its skies to allow regular cross-polar commercial air flights that will cut
several hours off flying times for high-traffic routes like New York-Hong Kong.

In addition to the time savings, which will be a blessing to travelers, the new
polar routes will be a financial boon to airlines, saving them tens of thousands
of dollars per flight in fuel, maintenance and operational costs. And Russia,
with an average navigation fee of $71 per 100 kilometers for foreign airlines,
will see revenues grow as traffic increases.

The new routes ≈ dubbed Polar 1, 2, 3 and 4 ≈ cross about 4,200 kilometers of
Russian territory over the Krasnoyarsk and Yakutsk regions and are separated
from each other by 1,000 kilometers. These routes can potentially service 33
pairs of cities, including Atlanta-Seoul, Los Angeles-Bangkok and
Vancouver-Beijing.

A feasibility study conducted by the Canadian air navigation authority NavCanada
found that Polar 1 and 2 could bring in as much as $96 million and Polar 3 and 4
another $234 million over the next 10 years. Currently, Russia earns $160
million annually in navigation fees.

The money will go toward modernizing the country`s air traffic control systems,
which will be upgraded as traffic grows, said Viktor Galkin, head of air traffic
control for Russia`s State Civil Aviation Service.

The NavCanada study also found that a flight from Vancouver, British Columbia,
to Delhi, India, for example, could be completed in 13.5 hours, compared with
the current 18 hours, by crossing the Russian-Canadian polar zone. Current
flights cross the Pacific Ocean.

The NavCanada study also concluded that the reduction of flight time and the
elimination of stopovers will save airlines as much as $26,000 for each
Vancouver-Delhi flight. And the savings on the New York-Hong Kong route, which
will be five hours quicker, could be as much as $50,000 per flight.

A Transaero airlines DC-10 was the first guinea pig, flying from Krasnoyarsk to
Toronto in 11 hours in July 1998. Since then, as many as 479 such flights have
been flown, mostly by foreign airlines, including U.S. giants United and
Northwest and Hong Kong`s Cathay Pacific. Krasnoyarsk-based KrasAir has also
used the new corridors for cargo flights.

Richard Lien, Northwest`s top air traffic control officer, said in a telephone
interview from Minnesota that he was upbeat about the new routes, which
Northwest, United and Cathay Pacific will be the first to use. United has seven
flights a week scheduled, while Northwest has six and Cathay Pacific just one.

``It`s a success story from the standpoint of opening that airspace, and I
believe it will be used extensively in years to come,`` he said.

Project costs for Canada are expected to be only $4.6 million, while Russia will
need to invest about $33 million to update and expand their older air traffic
control system. The money is expected to come from either the State Civil
Aviation Service or from international lenders like the European Bank for
Reconstruction and Development, said Galkin.

Presently the four routes can accommodate just two flights an hour, eight hours
a day. But in 10 years, Galkin said, Russia should be able to handle 30 to 40
planes per hour. The NavCanada study said as many as 8,000 flights a year will
be possible by 2006.

``Russia has to use its powerful resource ≈ airspace ≈ which unlike oil or gas
will never expire, and we have to use it to the fullest,`` said Galkin.

``It really took the end of the Cold War and aircraft that can fly for 14 to 16
hours to make this feasible,`` Sidney Koslow, vice president of engineering for
NavCanada, said in an interview last year.

Indeed, the project marks not only an aviation milestone, but a political one as
well.

Allowing cross-polar routes was unthinkable under the Soviet Union, as national
airspace was heavily guarded. In fact, the danger of straying over Soviet
airspace was made clear in 1983 when a Soviet jet fighter blew Korean Airlines
flight 007 out of the sky over the Far East, killing all 269 passengers on
board.

But despite the cross-polar breakthrough, a dramatic increase in traffic will
require some cross-Atlantic diplomacy:

Inviting more airlines to use the new routes will require amending existing
aviation agreements between the United States and Russia. Negotiations have been
going on for months, but a State Civil Aviation Service spokesman said he
couldn`t comment on their status.

John Byerly, a senior U.S. State Department adviser, said in an e-mail interview
earlier this year that the two sides had made ``important progress`` and that
the United States ``looks forward to reaching an agreement /with Russia/ in the
near future ┘ that includes U.S. airlines operations on a regular basis on the
cross-polar routes.``

By Lyuba Pronina /Moscow Times/ www.avia.ru