UIA links growth in prices on domestic flights with sharp jump in currency exchange rate

The main reason of rising in the price of tickets on domestic flights is the devaluation of the national currency and the 50% increase in the U.S. dollar exchange rate seen in February-March 2014, the largest Ukrainian company Ukraine International Airlines (UIA, Kyiv) has said.

The press service of UIA said that the large part of expenses that airlines bear are calculated in U.S. dollars irrespective of the type of flight - domestic or international. Leasing of aircraft built in the West, expenses on aviation fuel, duties and fees for passing through airspace, and airport servicing fees are pegged to the U.S. dollar.

"It's indicative that even the obligatory fee paid by Ukrainian airlines to the state treasury for each passenger of domestic flights [50 cents] to the state special fund of financing general state expenses on aviation operations and participation of Ukraine in international organization is also pegged to the U.S. dollar," the airline said.

All tariffs for air tickets, including for domestic flights, are filed in the global booking system in the U.S. dollars, while passengers pay for the tickets in the national currency of Ukraine at the official exchange rate on the day of payment.

"The sharp rise in the U.S. dollar exchange rate resulted in a change in the cost of air tickets in hryvnias," UIA said.

The airline said that the company has several times asked for conditions to be created to cut the cost of domestic flights.

"UIA believes that a realistic cut in the cost of air tickets for domestic flights is impossible without the observation of the following conditions: the fair distribution of expenses between all participants of the air transportation logistics chain, restrictions of the markups of monopolists to justifiable levels (for airports, handling and catering operators, fuel suppliers and air navigation service suppliers, etc), an increase in the actual purchasing power of the public, and the creation of the realistic mass market of domestic flights," reads a press release of the airline. Airline corporate spokeswoman Yevhenia Satska said that despite the difficult political and economic situation the company confirms the fulfillment of its liabilities to passengers on domestic flights in full.

UIA was founded in 1992. It is the largest Ukrainian airline. Its home airport is Boryspil airport.

The UIA fleet consists of 40 aircraft: five Embraer-190s, 32 Boeing 737 aircraft, and three Boeing 767s.