New customs rules force Russian airline to remove seats

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Avianova, Russia's low-cost airline, will have to modify the layout of its aircraft and reduce the number of seats from 180 to 159 to comply with new customs regulations on imported aircraft.

Avianova, Russia's low-cost airline, will have to modify the layout of its aircraft and reduce the number of seats from 180 to 159 to comply with new customs regulations on imported aircraft.

The airline's fleet consists of five modern Airbus A320 in a single-class layout of 180 seats, which is now subject to 20% customs duty and 18% VAT.

"The unintended consequence of Russia's recent changes to the customs regime is to favor high fare, full service, carriers over low cost airlines: if you import Boeing 737s or Airbus 320s in a dual class configuration you avoid Duty and VAT," Avianova CEO Andrew Pyne said.

"If you import as we do in a single class configuration in order to reduce costs and hence fares, you are obliged to pay a punitively high amount of Duty and VAT."

This approach creates further inequality in the local air transport market and undermines the Government's stated policy of reducing Russia's high air fares, he said.

"We hope for further changes to create a level playing field for all airlines to compete on but in the interim we have no option - sadly - but to reduce seat numbers on our aircraft if we are to remain competitive," Pyne said.

MOSCOW, November 29 (RIA Novosti)

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