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25 Feb, 2008 21:01

High taxes and poor law halt business avaiation growth

The Russian business aviation market is growing rapidly with more investors coming to the country. But Russia still has a lot to catch up on in terms of tax policy and legislation for small aviation firms.

In 2007, Russian businessmen spent more than $US 2.5 billion on private planes.

Jet builders are even moving into the country -  Eclipse Aviation of the U.S. and Dutch investment company Etirc laid the foundation stone at an Ulyanovsk plant where they'll build the Eclipse 500 very light jet. It will be the first ever foreign aircraft produced in Russia.

Business aviation is growing by 30 per cent a year in Russia. But it could grow even faster if the country cuts import taxes on foreign aircraft and liberalises the rules.
Russian business aviation operators and amateur pilots, like Leonid Koshelev, Jets- 2000 President, are waiting the winds of change.

“If you drive a car, what is it you need – you need a number plate on your car, you need a driving license and insurance. With aircraft it’s the same thing. And up to now it’s not possible to do things like that in Russia with aircraft – you can’t register your aircraft and fly with your pilot’s license,” he said.

However state officials say this will change soon. “The rules for small aviation are not settled in Russia. The majority of planes are registered abroad because of high customs fees. That’s why it’s now very important to change our aviation code, to make it possible to register a private business jet in Russia,” Sergey Stepashin, the Head of Accounts Chamber, said.