AVIACENTER NEWS

The First International Conference "Aviation Fuel - 2012", held with the support of the Federal Assembly of the Russian Federation, completed in Moscow.

The level of the audience and the scope of topics make it possible to call this conference the main forum for discussing aviation fuel market and regulatory issues.

In his address to the conference participants, the Vice-Chairman of the Federation Council of the Federal Assembly of the Russian Federation, Vyacheslav Shtyrov pointed out that Russian civil aviation is currently working under very difficult circumstances, and the situation on the Russian aviation fuel market can be characterized as complicated. According to Shtyrov, it is impossible to solve most of the problems without engaging authorities that control transport and energy sectors. 

The conference was opened by Anton Koren, CEO of the Center for Strategic Development in Civil Aviation. In his welcome address he mentioned that there are quite a number of problems and issues in the aviation fuel supply sector. One of the main tasks is the one of supplying airlines with adequate amounts of aviation fuel. To accomplish this task it is reasonable to use medium term planning of aviation fuel production volumes, matching the expected air traffic growth and to implement planned levels of production at oil refineries. The problems of fuel shortage, which occurred in several large airports in Russia, will not happen again, provided quality planning is carried out - this was mentioned by many of the conference participants. It is estimated by Petromarket Research Group, that, taking into account the plans to expand the capacities of Russian oil refineries, aviation fuel shortage is expected to continue through 2012, and to be eliminated only by 2013. 

Dmitry Rutenberg, the Head of the Department for Control over Transport and Communications of the Federal Anti-Monopoly Service of Russia (FAS), informed the conference participants that over the period from 2010 until the third quarter of 2011 FAS had investigated nearly 50 antitrust offense cases on airport service markets, 17 of them on the fueling complex market. Among the main types of violations Mr. Rutenberg mentioned evasion of signing ground service agreements, preventing alternative operators from accessing the market, enforcing complex aviation fuel service (refusing to accept carrier-owned aviation fuel for storage), refusing to provide refueling services. 

According to Rutenberg, nearly 80 cases on the aviation fuel and fuel provision markets were initiated in 2008-2011 in order to improve the situation with fuel provision. Some measures were taken against the activities of oil companies on the federal wholesale market, including initiating cases over setting and maintaining a monopolistically high price and product withdrawal with an aim to increase aviation fuel price. 

Andrey Khvostunkov, the Deputy Head of the Department for Control over Transport of the Federal Tariff Service of the Russian Federation (FTS), told the participants of the conference about new measures in state regulation and fuelling complex services tariff control. According to him, the Russian FTS has currently decided to set tariffs for aircraft fuelling services for 32 natural monopoly subjects, providing services in 71 airports of the Russian Federation. This resulted in decreasing the aviation fuel provision tariff by an average of 12,1%, and the aviation fuel storage tariff by an average of 9%. 

Among major problems in state regulation of the airport fuelling complex services, Mr. Khvostunkov named disagreement of several fuelling complexes with a natural monopoly subject status, as well as constant changes on the airport fuelling services market. 

Alexander Gladkevich, CEO of TZK Sheremetyevo, specified in his report, that oil companies conform to guidelines of the Ministry of Energy, however the interaction between fueling complexes, suppliers and oil refineries is not brought under regulations.

Alexander Gladkevich also pointed out the problem of the lack of the investment component in fueling complex tariffs. This is detrimental for the development and renovation of the infrastructure. He paid special attention to the fact that current Federal Aviation Rules regarding aviation fuel supply are not effective and require improvement. 

Andrey Timoshenko, the Deputy Director of the certification center for aircraft petroleum products of GosNII GA, named a range of serious problems, threatening flight safety. For example, the system of aviation fuel provision no longer includes either approval procedures for using new and modified aviation fuels, based on full scale acceptance checkout, or the system of mandatory aviation fuel certification. Another major threat to flight safety is the lack of ongoing objective monitoring of aviation fuel quality and purity level. 

All these issues must be solved on the level of creating regulatory framework and providing resources.

Among the speakers of the First International Conference "Aviation Fuel- 2012" were: Vsevolod Sokolov, the Director of SPIMEX for North-East region with a report "Aviation fuel exchange market: current state and development outlook"; Nikolay Sukhnev, head of the 17th scientific research department of the 25th State Scientific Research Institute of chemmotology of the Russian Ministry of Defence with a report "Aviation Fuel Supply at joint aerodromes"; Anna Mikhailova, CEO of AirportFuelService LLC with a report "Using exchange trading tools by an independent trader"; Thomas Richter, a regional representative of Titan Aviation with a report "Eco-friendly aviation fuel supply with minimum costs"; Sergey Uryavin, the Director of the certification center for aircraft petroleum products of GosNIIGA with a report "The role of GosNIIGA in providing control for quality and use of aviation fuels"; Alexander Bylkin, an analytic of Petromarket Research Group with a report "An analysis of Russian aviation fuel market condition"; Mikhail Perfilov, Argus Media Business Development Director with a report "Aviation kerosene market in Russia: trends and price setting".

The conference was held with the support of the Federation Council of the Federal Assembly of the Russian Federation and the 'Airport' Association of Russia and CIS. The partner of the First International Conference "Aviation Fuel Supply - 2012" was AIRFLOT TECHNICS Trade House Ltd. 

Based on the conclusions of the First International Conference "Aviation Fuel Supply - 2012", recommendations aimed at solving burning issues of the aviation fuel market will be prepared for the Government of the Russian Federation and the Federal Assembly of the Russian Federation.