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Ukraine Airfields

Ukraine has an extensive network of military airfields, meeting the most demanding standards. To maintain, service, repaire, and develop the airfields, as well as the entire infrastructure of the aviation bases and their dwelling quarters, the Air Force established a special Administration for construction, engineering support, and lodging. Each structural unit of the Air Force includes the corresponding bodies in charge of construction and maintenance, which are responsible for, and capable of full and efficient implementation of the above-mentioned tasks. "Reliable airfield for powerfull aviation" - that is the motto of the Air Force Administration for Construction, Engineering Support and Lodging.

The Ukrainian Air Force can perform its duties only provided it has reliable and extensive logistics services. The Air Force logistics services are to procure machinery and material supplies from industrial enterprices, to store those in warehouses and depots, and also to deliver them to the utilization sites. Logistics services are also to provide ground services for aviation units, and to guard aviation bases and objects.

As of late 2003 Ukraine had 34 civilian or dual-civilian/military airports, of which 18 had an international status. In addition, Ukraine has an abundant 72 aerodromes and airfields, mainly used for general aviation and charter flights. Most of Ukrainian airports were built under the Soviet Union during 1960-80, and have diminished traditional transport flows since Ukraine's independence in 1991. Due to a prolonged economic recession in Ukraine, and slow development of the air transport sector, only eight of these 34 airports were regularly servicing flights. The year 2000 was the first time in 10 years that Ukrainian civilian air transport sector showed an increase in passenger flow, with traffic growing by 6%. Despite the slowdown in the global commercial aviation caused by the September 11 events in the United States, the growth in Ukrainian airports has further increased by another 28% in 2002, as compared with 2001. Air cargo transportation was equally on the rise from 2% in 2000, to 7.7% in 2001, and up to 23.7% in 2002. Local experts predict that this positive trend will continue, and the air travel market may double by 2005, provided that current economic reforms stay on track.

As of December 2000, all Ukrainian civil airports were still state-owned, and most were managed under the Ministry of Transportation. Two airports (Kiev/Zhuliany, and Odessa) were managed by city municipal authorities. However, in early 2001, the Ministry of Transportation (MOT) started a massive transfer of its airports to municipalities. The process is expected to be finished by the end of 2001. Several major airports will be kept under the management of MOT, and subject to further development by the Ukrainian government: Kiev-Boryspil, Kiev-Gostomel (reserve field), Simferopol, Dnipropetrovsk, Donetsk, and Lviv.

Ukrainian airports have the potential to service six million passengers annually (according to data provided by the Ukrainian MOT), but currently operate at only 30% capacity. 2,150,000 passengers used Ukrainian airports in the year 2000; with approx. 65% (ie 1,400,000 passengers) passing through one Ukrainian terminal, the Kiev-Boryspil airport. Boryspil serves almost 80% of international bound flights in Ukraine. The MOT hopes to turn Boryspil airport into an exclusive international hub for most major international connections (except to Russia), while the regional airports would connect Ukrainian internal flights to Boryspil.

The MOT also plans to refurbish the above listed existing regional airports to improve services for internal flights; and also to create some new 'international passenger areas' at several regional Ukrainian airports offering direct flight service to Moscow: Simferopol, Donetsk, Dnipropetrovsk, and Odessa. However, the poor financial condition of most of Ukraine's airports (except Boryspil) will not allow them funds to modernize terminals and create competitive services.

Practically all of Ukraine's airports require modernization and therefore significant investments to improve runways, passenger and cargo terminals, technological systems, air traffic control, transport and communications.

Most of these airports were built under the Soviet Union during 1960-80, and have drastically diminished traditional transport flows since Ukraine's independence in 1991. Kyiv-Boryspil (KBP) airport is the main Ukrainian international airport servicing almost half of entire air passenger traffic in Ukraine. The major regional airports are: Simferopol (SIP), Odessa (ODS), Lviv (LWO), Donetsk (DOK), Dnipropetrovsk (DNK), Kharkiv (HRK), and Kyiv-Zhuliany (IEV). Restructuring of Ukrainian airports is underway, with the regional airports being spun-off from the Ministry of Transportation as municipal or individual joint stock companies.

Most of Ukrainian airports are outdated and provide only a minimal required level of services for passengers. Practically all of Ukraine's airports require modernization and therefore significant investments to improve runways, passenger and cargo terminals, technological systems, air traffic control, transport and communications. Government investment programs on airports restructuring and development have been carried out very slowly, and were constantly revised.

The performance of Ukrainian airports is directly related to the general economic situation in the country and performance of airlines. Since the break-up of the Soviet Union in 1991and a protracted economic crisis that lasted through 1999, the airport traffic slumped by over 12,000%. Dozens of small regional airports and aerodromes were closed. . The gradual economic recovery, that started in 1999, and increased international travel placed additional demands on existing airport facilities. In response, local, regional, and central government comprehensive airport development programs call for improvements in airport capacity; the level of services; renovation of passenger and cargo terminals; construction of additional runways, hangars, and warehouses; improvement of ground transportation facilities; the upgrade of air traffic control equipment, optimization of take-off and landing schedules, and the development of airport transport infrastructure. The success of continued airport privatization and "commercialization" in Ukraine will also require new management techniques that improve airport performance.

Funding for many of the airport development programs comes from a combination of sources including, but not limited to, the Ukrainian government, multilateral financial institutions such as European Bank for Reconstruction and Development (EBRD) and the World Bank (WB), Ukrainian and foreign commercial banks, and airport revenues. At present, up to 98 percent of airport revenues come from airport charges, takeoff and landing fees and ground handling charges, thus making airports excessively dependent on airlines' performance. These charges have often led to complicated relationship between airport and airline management.

In 2002 the air cargo transportation grew by over 23.7% in Ukraine to 90,300 tons. It is all international air cargo, domestic air cargo service is unavailable in Ukraine despite the size of the country. The largest air cargo operators are: Antonov Airlines (51.4% growth in 2002), Ukrainian Air Transport Company (division of the Ministry of Defense, 11% growth), Urga (21% growth), Volaire, and Ukraine International Airlines.

Radical changes are bound to hit the Ukrainian airport sector. The Government of Ukraine (GOU) has initiated creation of an airport holding with the purpose of bringing the Ukrainian airport infrastructure in compliance with international standards. The GOU plan envisages a unification of seven largest Ukrainian airports, which together account for over 85% of all air passenger and cargo traffic in Ukraine. These airports are: Kyiv-Boryspil, Kyiv-Zhuliany, Simferopol, Dnipropetrovsk, Donetsk, Odessa and Lviv. By end-2003, GOU plans to complete corporatization and partial privatization of these airports (no less than a 50% interest in each airport will be owned by the government). Then, a minority share will be offered to investors. In 2001, the Ministry of Transportation (MOT) started a full-scale transfer of those airports that will not be part of the holding to municipalities.

Having in possession a fleet of the world's largest air freighters Antonov-124's and Antovov-225, Ukraine offers good sales opportunities for U.S. firms involved in cargo terminal engineering and operations, cargo handling equipment, air navigation and ground support, freight forwarding and chartering. Additional opportunities exist in a planned conversion of former military airbases into cargo airports, as actively promoted by GOU.

Ukrainian Ministry of Industrial Policy is coordinating a $54 million project for a green-field development of a large air cargo terminal at the base of existing Gostomel (Antonov) Airport near Kyiv. The proposed cargo airport will be compatible in size and capacity to aircargo hubs in Anchorage (AK), Mesa (AZ), and Toulouse, France. U.S. Trade and Development Agency (TDA) is financing the project feasibility study, performed by Solid Team LLC. (Claremont, CA). The actual implementation will require minimum $10-12 million in U.S. exports in equipment and technology.

Ministry of Transportation announced a $60 million project for development of another cargo airport in Striy, Lviv Oblast. The project will require a major conversion of the existing military facility supplemented by a green-field construction of the terminal, overhaul and repair facilities, bonded warehouses, customs and security areas. Local government in Zakarpattyia is actively promoting a similar project for air cargo terminal on the territory of former airbase in Mukachevo. Both project will benefit from proximity to Eastern European states (Poland, Slovak Republic, Hungary, and Romania) that will soon become EU members.

As of 2003, the Ukrainian state register included 1,386 civil aircraft, including 856 being possessed by the state (namely, 601 airplanes and 255 helicopters). Only 434 of them were airworthy, while average depreciation of the fleet totaled 74 percent. The most used aircraft types are AN-24 and AN-26, TU-154 and TU-134, YK-40 and YK-42. Ukraine is facing a critical problem of modernizing its aviation equipment, as the life span on most of aircraft types expires in the next decade.

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