| FAS opposed the creation of a single aviation holding company The head of the Federal Antimonopoly Service (FAS) Igor Artemyev yesterday criticized the idea of merging the Russian aircraft industry into one company. Just two days earlier, this idea was supported by Vladimir Putin at an off-site meeting of the State Council in Zhukovsky near Moscow. The President called this a “final decision” and instructed the government to prepare a decree on the creation of such a company. Yesterday, Mr. Artemyev said that the FAS, headed by him, will never be able to have a positive attitude towards the creation of such holdings. In addition, he expressed the opinion that actions to organize an aircraft manufacturing company could be challenged in the Constitutional Court of Russia.
The concept of creating the United Aircraft Company (UAC) was developed by the Ministry of Industry and Energy. Two weeks ago, the head of this department, Viktor Khristenko, reported it to President Putin. On February 22, the concept was approved at a meeting of the State Council Presidium chaired by the President. According to the concept, the UAC (or, as it is also called in some preparatory documents, ENAC - the Unified National Aircraft Manufacturing Company) should be organized by the end of 2006 by merging the assets of all the main enterprises of the Russian aviation industry - both privatized and those remaining under state control . The company will unite leading developers and manufacturers of military (RSK MiG, AHC Sukhoi, Irkut) and civilian (JSC Tupolev, Ilyushin Corporation) aircraft, which are now competing with each other in various niches of the aviation market . The result should be a structure managed from one center, with a predominance of state capital (according to Mr. Khristenko, at least 60-70%). The government sets UAC the task of ousting foreign competitors by 2015, winning at least 10% of the global aircraft market from them.
According to Mr. Artemyev, Interfax reports, much earlier than this date the company may become the subject of proceedings in domestic courts. He recalled that “the words “competition” and “economic freedom” are spelled out in the Constitution. If any structure is created unconstitutionally, there is always a Constitutional Court in which its creation can be challenged, said the head of the FAS.
From an antimonopoly point of view, Mr. Artemyev criticized exactly what the developers of the UAC concept consider the fundamental advantage of their idea: the elimination of internal competition between Russian enterprises for the sake of their joint participation in competition with foreign competitors. “We will never have a positive attitude towards the creation of such holdings, that’s why we are an antimonopoly authority,” said the head of the FAS. Mr. Artemyev called for "a critical examination of the rationale for the creation of this holding, which is that as a result Russia will win the competition in the world market." He emphasized that the UAC will automatically become a monopoly within Russia. “If we create a single aircraft manufacturing holding, which will have a share of 10% in the world market, then this is not dominance. But if you look at this situation within the boundaries of the domestic market, its share will be one hundred percent,” stated Mr. Artemyev.
Acting President of the Irkut Corporation Valery Bezverkhikh, who at a meeting of the State Council was tasked with leading the preparatory work for the creation of the UAC, yesterday commented on the statement of the head of the FAS: “It makes no sense to talk about monopolism in the domestic Russian aircraft market, since now this domestic market actually does not exist. Today, Russian aircraft manufacturing enterprises receive most of their funds from exports. And in foreign markets we compete with such giants as Boeing and Airbus.”
Igor Artemyev reminded the president that the Constitution protects competition Mikhail KUKUSHKIN |
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