1. CIS Today and in the future Simon McNamara European Regions Airline Association

2. Contents  Aviation development in the CIS – parallels with Europe  What liberalisation achieved in Europe  What helped liberalisation in Europe  Development of air services in the CIS  Low cost and the CIS

3. Parallels with Europe in the 80s  Collection of individual national markets  Bilateral agreements and cabotage rules on cross border and domestic services which control  Capacity  Frequency  Market access  Pricing  Mostly “national” airlines dominant in home markets  Poor commercial and customer awareness  Heavily reliant on state aid

4. Liberalisation achieved....  Rapid growth of independent carriers  Increased competition between carriers  Forced incumbent airlines to “improve” or “die”  Reduced the cost of air travel  Encouraged private investment in airlines and infrastructure  Promoted innovation and new business models  Increased mobility for the population

5. What helped Liberalisation  Innovative “2 nd tier” carriers pressing for change  Experience of deregulation in other areas  A law making process that enabled cross border legislation  A simple concept – the “Community air carrier”

6. Constraints on development Growth of air services in the CIS will be limited by:  The regulatory environment – barriers to market entry  Infrastructure availability and suitability – development of secondary airports to enable “hub bypass”  Cost of air travel – must be accessible to the wider population  Aircraft replacement strategies – a rapidly ageing fleet  Accessibility of air travel – changing the perception of air travel as a mode available to all through marketing, price, safety, service

7. Low cost and the CIS In Europe “low fares” carriers did not become well established until the market was fully deregulated.

8. Constraints on development The critical path in Europe to developing air travel was overcoming POLITICAL obstacles