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Russian Transport Min. proposes cut import duties on foreign planes

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  • Russian Transport Min. proposes cut import duties on foreign planes

    Russian Transport Ministry proposes cutting import duties on foreign planes

    AP Worldstream; Sep 01, 2006
    ALEX NICHOLSON

    Russia's Transport Ministry will propose cutting or scrapping import
    duties on foreign aircraft, a spokeswoman said Friday, a day after the
    prime minister called for overhauling flight safety standards for
    Russia's aging civilian air fleet and airports.

    A proposal to change the unpopular 20 percent duty on imported foreign
    aircraft would be submitted to the government later Friday, a ministry
    spokeswoman said, speaking on condition of anonymity because the
    proposals had not yet been submitted.

    The ministry is hoping to have the tax eliminated altogether, she
    said.

    Aviation experts have said the import duty has put planes such as
    Boeing and Airbus out of the reach for cash-strapped airlines, forcing
    them to buy aging foreign planes or domestic aircraft. In the past,
    only national flag carrier Aeroflot and private carrier Transaero have
    been given state breaks to purchase new foreign jets.

    The proposal also calls for building additional runways at 12 Russian
    airports, including Moscow's Sheremetyevo and Domodedovo and
    St. Petersburg's Pulkovo airports, the ministry spokeswoman said.

    More than 400 people have died in the past year in a series of airline
    crashes involving the airline industry in Russia and other ex-Soviet
    republics, prompting government officials to call for better safety
    standards.

    Prime Minister Mikhail Fradkov on Thursday told a Cabinet meeting on
    flight security that Russia should not rely solely on new foreign
    planes, but needed to quickly reform its struggling aviation sector
    and accelerate homegrown production.

    Despite a substantial production capacity, Russian factories produced
    just a handful of civilian aircraft last year, while Russian airlines
    imported 20 used foreign jets. In total, 200 foreign aircraft are used
    by Russian airlines, the Vedomosti business daily reported Friday.

    Russia also lacks an affordable leasing system that would allow
    companies to acquire new Russian planes, meaning companies typically
    chose instead to buy older foreign or domestic jets.

    In a bid to boost domestic production, the government is pushing ahead
    with the creation of a national aircraft holding company to unite
    Russia's civilian and military producers under one corporate roof. The
    United Aviation Corp. has been promised hefty state funding and will
    be 75 percent controlled by the state.

    Last week, a Tu-154 jet belonging to Russia's Pulkovo Airlines crashed
    in Ukraine after encountering a storm, killing all 170 people
    aboard. In July, an Airbus A310 belonging to Russian airline S7
    skidded off a runway and burst into flames in the Siberian city of
    Irkutsk, killing 124 people.

    In May, an A320 belonging to the Armenian airline Armavia crashed into
    the Black Sea in rough weather while trying to land in the Russian
    resort city of Sochi, killing all 113 people aboard.
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