crimea: a new center for business aviation

September 12, 2019

The Russian government aims to turn Crimea, the disputed Ukrainian territory annexed by Russia, into a new center for Business Aviation. The move is part of an ongoing effort to improve the peninsula’s international image and to attract foreign investors. Eugene Gerden reports

According to one government authority, the new Business Aviation airport will likely be established already this year and will be located at Sevastopol’s Belbek Airfield. Belbek Airport, built in Russia soon after the start of World War II, was initially used by the Soviet Air Forces. From 1970-1980 it was revamped to better deal with governmental aircraft. After the collapse of the USSR, further development of the airport was mostly suspended, only being resumed after Russia’s annexation of Crimea in 2014.

The idea of turning the Crimean Republic into a new Russian center for Business Aviation was initially approved by Russian President Vladimir Putin back in 2016. Putin instructed the Russian federal government, as well as the authorities of the Crimean Republic, to prepare a number of proposals for developing Business Aviation within the Crimean Peninsula. However, implementation of these plans was suspended shortly thereafter due to the imposition of economic sanctions against Russia by Western countries. Plans were only resumed last year thanks to a significant improvement in the Russian economy.

Evgeny Plaksin, general director of Simferopol International Airport LLC (the managing company of Belbek), says that after reconstruction is complete, Belbek Airport will primarily focus on serving the needs of Business Aviation and will be one of the largest bizav airports in all of southern Russia. Plaksin says that building of the main business terminal has already started and is expected to be completed by the end of the current year. He also notes the Russian Defense Ministry successfully completed reconstruction of the main runway last year. It currently has the length of 3.45 km and can deal with all types of business jets and even large commercial aircraft.

Belbek Airport will begin full-scale operations at the beginning of 2020. Although the volume of investments in the project has not been disclosed, according to some sources in the Crimean government, they are estimated between US $150 and $200 million. The majority of funds will be allocated from the Russian federal budget and the budget of the Crimean Republic.

Once operational, many Russian analysts believe Belbek Airport will be ideally suited to serve the region’s Business Aviation needs. For example, due to its location some distance from Sevastopol, its use by commercial airlines is economically unreasonable.

Welcomed News

As an official spokesman of the Russian Presidential Administration told BART International, the development of Business Aviation in the Crimean Republic is considered a strategic task by the Russian government, as successful implementation of these plans should provide an impetus for a further economic development of Crimea and will significantly improve its business climate. It will also stimulate large businesses, both domestic and foreign, to invest in the Crimean economy which, due to sanctions, is currently experiencing an acute shortage of direct investments.

For many leading Russian and foreign business jet operators, the new development is welcomed news. According to Denis Mazirka, head of TopAvia, one of Russia’s leading business jet operators, most market players support the idea of turning the Crimea into a Business Aviation hub. He notes that doing so will be particularly beneficial to foreign airlines, operators and the owners of private jets to Russia and the Crimea in particular.

The Big Picture

The renovation of Belbek Airport is just one component of a comprehensive strategy for building Crimea’s Business Aviation infrastructure. According to recent statements by an official spokesman of the Crimean Ministry of Transport, similar plans are now being considered for other regional airports, including Koktebel, Evpatoria and others. The only problem with moving these plans forward is a shortage of available land for building the necessary infrastructure – the Crimean Peninsula is a heavily mountainous area. Of the sites that would be suitable for airport infrastructure, most are already being used for agriculture, industry or military purposes.

The development of the Business Aviation sector in Crimea will also involve a massive training of airline pilots. For this purpose, the Russian federal government recently approved the opening of a branch of the Russian Ulyanovsk Institute of Civil Aviation, Russia’s most prestigious flying school, in Crimea. These plans have been confirmed by Sergey Aksenov, president of Crimea. In addition to common commercial pilots, the newly established branch will focus on the training pilots and staff specially for the needs of Business Aviation.

According to Aksenov, the development of Business Aviation has a strategic importance for the Crimean Republic – and Russia in general – especially in a view of the possible lifting at least part of the sanctions against the country. He notes that doing so could result in an influx of potential investors to Crimea.

Bring in the Billionaires

As to funding, the Russian government is depending on state reserves and the financial support of domestic private businesses. As to the latter, the government hopes it will be able to convince large domestic business to provide funding for the development of Business Aviation in Crimea, as it did in the case of yachting.

Currently, the Crimean Peninsula is one of Russia’s leading yachting destination, a position it achieved thanks in large part to funding coming from Russian billionaires, such as Oleg Deripaska and Arkady Rottenberg. Some of these people may provide the funding needed to develop Business Aviation in the Crimean Republic. According to a spokesman of the Russian Presidential Administration, negotiations are already underway.

A South Russia Hub

According to some Russian analysts, the development of Business Aviation in Crimea could be part of an ambitious plan by the Russian government to establish a large-scale Business Aviation hub in the South of Russia. In addition to the Crimean Peninsula, it will also include the city of Sochi, which is Russia’s major Black Sea resort. If everything goes ahead, the Crimea/Sochi hub could become Russia’s second largest Business Aviation hub, both in terms of the annual number of performed flights and passenger traffic.

In regard to Sochi, the city already has the status of one of the most popular domestic destinations for business flights. The VIP terminal at Sochi International Airport was officially opened on December 2013 and has since served over 150,000 passengers and about 20,000 business flights. Its share in the overall structure of Business Aviation flights in Russia is estimated at about 8-9%.

Anna Serezhkina, executive director of the Russian United Business Aviation Association (RUBAA), confirms that Sochi’s status as one of the most popular destinations for Business Aviation flights in Russia. According to her, this is mainly due to the large number of sporting events and various business forums that take place in the city. Serezhkina also notes that, according to latest RUBAA data, the number of Business Aviation flights conducted by business jets owned by Russians to Crimea has also significantly increased in recent years and continues to grow.