Russia is an important aviation neighbour of the EU. With more than 40% of all scheduled Russian passenger traffic directed towards EU destinations, the EU is Russia’s largest international aviation market.
Passenger traffic between the EU and Russia has substantially increased over the last years to a new all-time high of more than 19 Million available seats in 2011. In air freight Russia is the 8th most important extra-EU partner with an average growth rate over the last five years of about 16%. There are strong indications that the aviation markets between Russia and the EU will continue to grow.
Aviation relations between Russia and the EU have been difficult over the last decade, the main issues being EU airline designation and Siberian overflight royalties. However, major progress has been achieved in the framework of the EU-Russia Aviation Summit in October 2011 when Russia agreed for the first time to accept EU airline designation. Russia was expected to agree on introducing the necessary changes in all bilateral air services agreements between EU Member States and Russia. However, Russia unilaterally decided to put this process on hold. Therefore, the bilateral air services agreementd remain in breach of EU law.
The situation is equally difficult when it comes to the issue of Siberian overflight royalties. In the framework of Russia's WTO accession negotiations in 2011, the EU and Russia reached an agreement on the phasing-out of these royalties. This is built on the 2006-agreement between the EU and the Russian Federation ("Agreed Principles") which was initialled by Commission Vice-President Barrot and Transport Minister Levitin. The main building blocks of the agreement are that as of 1 January 2014, all overflight royalties shall be cost-related and transparent and shall be paid to the responsible authorities, and as of 1 January 2012, newly added flights of EU carriers to Asian destinations shall no longer be charged.
However, Russia refuses to respect this important commitment by introducing an unacceptable link to the resolution of the inclusion of aviation in the EU's Emission Trading System ETS. At various occasions and at all political levels, the EU has reminded Russia of the importance to respect its formal commitment on the phasing-out of Siberian overflight royalties. The two issues are entirely separate and cannot be linked. Russia's non-respect of an important international agreement also undermines its credibility vis-à-vis its international partners.
Discussions about solving the dispute about the EU ETS continue at international level (ICAO). In January 2012, the ICAO President announced a new process to accelerate progress on market based measures and further discussions are currently ongoing in ICAO in order to find a way forward.