Trends in the development of the air transportation market of Ukraine and influencing factors

Abstract

Introduction. Given the current complex realities of conducting aviation business in a pandemic, the application of large-scale measures to combat its spread, as well as taking into account the development of liberalization of the air market, analysis of the effectiveness of Ukrainian airlines and identify current trends in Ukraine's air transportation market is an important task. The purpose of the paper is to investigate state of air transportation market in Ukraine in dynamics, to identify current trends and status of national airlines. Results. After the recession of 2014-2015, the volume of international passenger traffic by domestic airlines increased during the period 2016-2019. In 2020, it decreased by 76 %. At the same time, passenger traffic of Ukrainian airlines decreased by 65 % compared to 2019. Over the past five years, Ukraine’s air transportation market has evolved from highly concentrated to moderately concentrated. During this period, domestic airlines were more active in carrying out charter flights, while foreign airlines began to dominate in performing regular and scheduled flights with active participation of leading European low-cost airlines. Analysis of the market share of airlines with the largest volumes of passenger air traffic in air market of Ukraine showed that over past three years there has been a rapid decline in market shares of leading network airlines, both domestic and foreign. There was a rapid growth of market shares of foreign airlines – low-cost carriers. Conclusions. The changes identified in the air transportation market of Ukraine can be explained not only by the consequences of the pandemic, but also by the consequences of air transportation market liberalization. The signing of the Agreement on the Common Aviation Area in September 2021 between Ukraine and the EU will have a direct impact on the development of air transportation market of Ukraine, both in terms of supply and demand. Domestic airlines will be able to benefit from market liberalization only if they increase their competitiveness.

Development of European aviation integration: Ukraine on the path to the European Common Aviation Area

“…This confirms the conclusions made by Landru et al ( 2021) that implemented multilateral agreements accelerate the growth of the lowcost airline network. Despite the negative impact of global anti-pandemic COVID-19 measures on air travel, Ukraine managed to reach a rapid upward trend in 2021 (Ovsak et al, 2021b).…”

Organizational and Legal Aspects of the Agreement Between Ukraine, the European Union and Its Member States on the Common Aviation Area

“…Прихід нових іноземних авіаперевізників, в тому числі світових лідерів, та нарощування ними об'ємів перевезень за рахунок більш розгалуженої мережі маршрутів, більшої кількості рейсів і можливості забезпечити для пасажирів більш зручнішого у порівнянні з українськими авіаперевізниками розкладу як у прямому, так і трансферному сполученні, може привести до витіснення з ринку українських авіаперевізників [4,5]. Слід зазначити, що іноземні авіаперевізники здебільшого намагаються закріпити свої позиції на маршрутах між своїми столицями та Києвом та забезпечити за рахунок українських транзитних пасажирів завантаження своїх рейсів в межах Європи та до інших країн [6]…”