REUTERS
The bill, tabled in the Rada, exempts domestic air transportation services from VAT.
Ukrainian Infrastructure Minister Vladyslav Kryklii says the ministry is drafting a separate state program to support Ukrainian air carriers in the context of coronacrisis.
The comment came during this week's public debates on the draft National Economic Strategy of Ukraine until 2030, as reported by an UNIAN correspondent.
"We are seeking a separate program to support our air carriers. Unfortunately, Ukraine was almost the only country in Europe that failed to offer any effective tools and formats to back airlines [amid the pandemic]," he said.
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Airlines' losses over COVID-19 pandemic
Among all the industries hit by COVID-19, aviation has suffered the most. According to the International Air Transport Association (IATA), in 2020 alone, airlines may face US$157 billion in losses due to crisis.
Since the onset of the pandemic, many Western countries have allocated huge funds from the national budgets to support their countries' airlines. In particular, back in May 2020, the German government announced plans to provide Lufthansa with an aid package totaling EUR 9 billion. The funds were to be used, in particular, to support the airline's technical base in proper condition pending a stand-by period, pay salaries to employees, and provide refunds to passengers for canceled flights.
Meanwhile, Ukrainian air carriers saw no such government support amid crisis. In addition to challenges due to limited passenger traffic and respective losses, carriers must also deal with passengers outraged by cancellations and rightfully demanding a refund. Ukraine International Airlines (UIA) alone compensated their passengers more than US$26.5 million from April 2020 to January 2021.
In December 2020, UIA called on Ukrainian President Volodymyr Zelensky to instruct the government to develop an action program to provide the company with repayable financial aid (borrowings or stabilization loans) to ensure timely payments to their staff.
In January 2021, the company applied to the Health Ministry to review and approve new rules for crossing into Ukraine by holders of a valid inoculation certificate.