Ukraine lies on the rails

Kiev intends to ban passenger rail transportation to Russia.
In Kiev they are talking about the termination of the railway passenger communication with Russia. For Russian Railways, this will not be a problem, since only one Russian transit train travels to Ukraine to Chisinau, but it can hit the local Ukrzaliznytsia, for which Russian trains were the most profitable ones. According to sources from Kommersant in Ukraine and analysts, transit carriers from neighboring countries - Belavia, Air Baltic, railways of Moldova, as well as Ukrainian road carriers will benefit.

Minister of Infrastructure of Ukraine Volodymyr Omelyan reiterated on August 6 that the government "is considering an option" for the termination of the railway communication with the Russian Federation. As explained by a source close to the ministry, passenger traffic (about 2 million people a year) will go to air and road transport. According to him, Belarusian airline "Belavia" will benefit from this (direct air communication between Russia and Ukraine stopped in the autumn of 2015) and private road carriers that fly to Russia, for example, from Kharkov and Sumy.

According to the interlocutor of "Kommersant", the date of the termination of transportation has not been finally determined, but it should be expected in late 2018 - early 2019.

On the plans of Ukraine to interrupt the passenger communication with the Russian Federation by rail, Kommersant reported on May 25, 2017. Then sources close to the government of the country told Kommersant that Kiev was preparing to stop the communication from July 1. The formal reason was that JSC RZD did not stop passenger transportation "from the ATU zone" - from unrecognized DNR and LC. But then "Ukrzaliznytsya" (UZ, railways of Ukraine) denied the existence of such plans. Mr. Omelyan also earlier urged to stop the communication with Russia. "I proceed from the fact that we do not need to go to Russia," he said in December 2017. "At the moment there are trains that go to Moscow, and I hope that UZ will reconsider its policy."

He added that this also applies to road hauliers. "We need to convince Ukrainian citizens that there is nothing to go to Russia," the official said, urging family members of Ukrainians living in Russia to travel to Ukraine themselves.

In JSC Russian Railways refused to comment. Today the trains of the Federal Passenger Company (responsible for long-distance follow-up to JSCo Russian Railways) and so through Ukraine do not go, except for the Moscow-Kiev-Chisinau (Commonwealth) transit train. Also from Moscow to Kiev, you can get four UZ trains and two - the railways of Moldova (PFM). Also from Moscow, trains or trailers UZ go to other cities of Ukraine.

Passenger transportation for UZ is unprofitable - the cost, according to the company, exceeds the income by 3.3 times, and the country's budget delays compensation for the transportation of exempts. But from the flights to Russia, UZ gets a profit: in 2017, trains to Russia were on the first, second and fifth place in terms of profitability, UZ reported to the Ukrainian media. In particular, the Kiev-Moscow train with a "population" of 77% showed UAH 154 million profit ($ 5.7 million), Odessa-Moscow - UAH 98 million ($ 3.6 million), Kiev-Saint Petersburg - UAH 20 million ($ 0 , 7 million); Trains to Moscow from Khmelnitsky, Lviv, Kovel and Kharkov were also profitable.

According to a source from Kommersant close to the Ministry of Infrastructure of Ukraine, this decision is political and economically unprofitable for Ukraine: transportation of US to Russia goes under international tariffs, more than four times that of domestic ones.

According to the interlocutor of "Kommersant", close to the US, the economic losses from banning transportation to Russia are unlikely to compensate the budget. To minimize losses, it will be necessary to increase the prices of tickets for other transportations, including for Intercity trains running in the direction of the EU, he believes. In the PFM, Kommersant reported that they did not receive official documents on the possible termination of the trains running to Moscow. The source of Kommersant in the PFM expressed hope that the ban will not affect transit, as dictated by international rules.

The interlocutor of Kommersant, close to Belavia, says about the increase in passenger traffic: "On the flights there is a constant sell-out, we sometimes expect the arrival of Embraer, and the eight-hundredth (the Boeing 737-800) arrives, because all the tickets are sold and there are still those who wish" . "If the railway communication between Ukraine and Russia ceases, our company will receive new passengers, we will update the park and intend to continue," he said.

In the opinion of Mikhail Burmistrov, head of Infoline Analytics, the cancellation of trains will hit the UZ first of all: its trains are now the most profitable on international routes because of the lack of alternative and high cost of transit flights via Minsk, Riga, Chisinau. He believes that, in addition to Belavia, Air Baltic and the PFM will also benefit.