The sudden U-turn of the Irish low-cost company is the result of the arrogant commercial policy of its leaders. But also the symptom of a Ukraine that cannot get rid of the oligarchs’ excessive power.
“Ukraine is not yet a sufficiently mature or reliable business location to invest valuable Ryanair aircraft capacity”, David O’Brien, Ryanair’s Chief Commercial Officer, said in an official statement
According to Ryanair, Kiev Boryspil Airport failed to honour a growth agreement reached at the Ministry of Infrastructure, choosing to “protect high fare airlines (including Ukraine International Airlines) and deprive Ukrainian consumers/visitors access to Europe’s lowest air fares”.
As a result, Ryanair has canceled 4 new Kiev routes and 7 new Lviv routes. “Lviv Airport has fallen victim to Kiev Airport’s decision”, the statement continues.
However, how have things gone?
All for free
The Economichna Pravda newspaper was able to see Ryanair’s requests to Kiev Boryspil airport. Requests like free air navigation, free registration desks, free ad spaces, free baggage claim system, free ticket offices, free land near airport for hotel construction, an airport charge of 7,5 dollars per passenger for the next 4 years and 35% share of duty-free incomes.
The suspicion that Ryanair landed in Kiev thinking of going to the flea market is obvious. Nevertheless, it doesn’t explain everything.
The Infrastructure Minister Volodymyr Omelian said it was clear that Ryanair’s choice was a result of the resistance of Ukraine’s International Airlines (UIA), a Ukrainian air carrier monopolist, owned by the oligarch Ihor Kolomoyskyi, who is also a Boryspil’s stakeholder. In short, Kiev airport’s decision would only be to block the entry into the Ukrainian skies of Ryanair to protect the interests of Kolomoyskyi and his cronies. While Kiev airport busted everything up, Lviv airport has signed an absolutely lucrative contract with Ryanair, at the same conditions offered to Boryspil, Omelian added. This, however, has not stopped Ryanair from abandoning Lviv and the whole Ukraine “transferring its capacity to competing markets, such as Germany, Israel and Poland instead”, the airline’s statement concludes.
Medicine against corruption
As usual, the low-cost company statement is a plain bluster.
Kiev airport director Pavlo Ryabikin defended saying that “Ryanair’s demands were extremely harsh and far from market standards. This deal would have resulted in 2 billion hryvnias losses yearly for the airport”. What would explain that another Kyiv’s airport, Zhyliany, owned by the municipality, had also closed negotiations with Ryanair in May 2017.
From another point of view, an expert for the Ukrainian Logistical Alliance, Artur Vinikov-Proshchenko, suggested to the Ukrinform website that ticket pre-sales were far below expectations. Ryanair may not have considered Ukraine a profitable market.
Ryanair’s choice will certainly be in line with its overbearing and arrogant trade policy. But it’s equally in line with a country in the hands of the oligarchs, where the reforms are stalled, corruption is still rampant and foreign investment are virtually non existing.
It is no coincidence that the reactions of the Ukrainians on social networks have been furious not against the low cost airline but towards Ukrainian airlines.
Ryanair’s entry in Ukrainian skies has enormous symbolic significance, being perceived as the real way to Europe. Now that the EU has implemented the visa-free regime, it is the lack of money to main obstacle for most Ukrainians on the way to Europe. The Irish low cost rates are what Ukrainians need.
Prime Minister Groysman said the negotiations will resume. But if Ryanair one day turn back amidst lack of reforms, it would be for Ukraine like swallowing the prescription instead of the medicine.
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The sudden U-turn of the Irish low-cost company is the result of the arrogant commercial policy of its leaders. But also the symptom of a Ukraine that cannot get rid of the oligarchs’ excessive power.
