One of the principal topics of discussion regarding air transport regulation is the accession of Russia to the Convention for the Unification of Certain Rules for International Carriage by Air (the Montreal Convention) of 28 May 1999. The corresponding Federal Law was signed by the Russian President on 3 April 2017. Russia has made the reservation on non-applicability of the Montreal Convention to i) internal air carriage performed by Russia for non-commercial purposes in connection with the exercise of its functions and duties as a sovereign state, and (ii) carriage of persons, cargo and baggage carried out for the military authorities on aircraft registered in or leased by Russia that are fully reserved by, or on behalf of, these authorities.
The accession to the Montreal Convention is considered a positive achievement. However, there is concern that air fares will also increase by 25–30 per cent, since the air carriers will have to cover the expenses in connection with compensation payments made for delays of scheduled flights.
Additionally, the penalties for in-flight brawlers (hooligans) have been stiffened in Russia. For more detailed information see question 43 hereof. Moreover, the draft Federal Law establishing the blacklist of passengers is being considered by the Russian legislative body. Such draft Federal Law allows a carrier to refuse to enter into a carriage agreement with blacklisted passengers.
There are proposals to reduce the VAT rate to zero per cent for internal air carriage of passengers and baggage (at the moment, it is a reduced rate of 10 per cent as a general rule, and zero per cent for air carriage of passengers and baggage to and from Crimea), and some are of the opinion that a zero per cent VAT rate should be applied primarily for regional air companies, which do not use Moscow Aviation Hub, in order to increase competitiveness on the routes, where only one to two air companies operate.
At the airports of Vladivostok, Sochi and Kaliningrad, the domestic open skies regime (including the right of a carrier to perform landing to let off or take in passengers in one of these airports while performing international carriage between two foreign airports – the fifth freedom of the air) is applied, which significantly facilitates the access of foreign air carriers to certain Russian airports to conduct scheduled and charter flights and as a consequence is designed to develop certain regions of Russia. The implementation of the Open Skies regime in certain Russian regions is likely to garner particular interest from foreign air carriers, especially in view of political instability and safety risks in traditionally popular tourist destinations (Turkey, Egypt, etc) for tourist carriage and in the view of major international events (eg, the FIFA World Cup 2018 in Russia).