UDC 338.47/48: 629.73 (045) O. Borysiuk, PhD (Geography), L. Bondarenko (National Aviation University, Ukraine) The Influence Airlines Have on Development of Ukrainian Tourism The article concentrates on interaction of air transportation and tourism. It reveals the problems which restrict intensification of such interaction and outlines the perspectives of tourist air transportation market’s development. Following the general theory of systems which considers every system to be a kind of integrity with its limits and hierarchy, we’ll assume transport to be such a system with all the ingredients which are necessary for its existence and functioning [4]. Any system comprises several sub-systems and open systems tend to increase the number of their sub-systems and ingredients. Air transport can serve as an example of such a system and K. Marintseva considers it to be a complicated and purposeful system which comprises airports, airlines and air traffic controls, which depend on demand for air transportation, resources, technological restrictions; economic, business and legal requirements; safety and ecology [5]. The essential backbone elements of air transportation system are airports connected by airlines which provide flights and in such a way create integrated territory. The main function of any airline as an ingredient of an air transportation system is to create and sell or distribute the product which can be called “air transportation of passengers, baggage, cargoes and posting”. Air transportation and tourism are interdependent. And it’s vital that people understand how these two industries coexist in the world economy and how they allow people to implement their own mobile opportunities in our modern globalized world [1]. Air transportation has become an element of tourist product, which leads to close interaction between airlines and tourist agencies. Such interaction implies booking and buying-out tickets, signing agreements concerning booking places on regular and charter flights. For instance, a tour operator Coral Travel transports passengers on regular and charter flights among the largest cities of Ukraine, having its own offices in these cities. This tour operator cooperates with UIA and WindRose airlines and their cooperation guarantees well-timed flights and high level of customer services. In 2019 UIA airlines, carrying out the order of Coral Travel, will provide flights from Kyiv to Anatolia and Dolman (Turkey), to Barcelona and Majorca (Spain), to Sharm El Sheikh and Hurghada (Egypt). Together with WindRose airlines Coral Travel offers package tours to Heraklion and Rhodus (Greece). According to the statistics of the previous year 80 per cent of flights started on time without delays and cancellations. Thus, nowadays close cooperation of airlines and tour operators is essential, as it provides tour operators an opportunity to receive competitive tariffs and airlines an opportunity to increase ticket sales. So, air transportation is becoming an 33.4 important factor of international tourism development. Popularity of air transportation of tourists abroad can be explained by the following features: 1) high cruising speed which provides opportunity to carry out long-haul nonstop flights during short periods of time; 2) less capital expenditures in ground-based constructions in comparison with other means of transport. Air transport needs 10-20 times less capital investments to launch a new air line. The main investments in air transport are necessary to construct an airport, but this airport provides an opportunity to organize several new connections with other airports. 3) air ways and air transport have a high level of throughput. 4) high level of comfort and customer service during passenger transportation. 5) high level of safety during flights. At the moment, importance of air transportation for tourism is growing much faster than importance of other kinds of transport. This tendency is becoming obvious due to new far away destinations which can be reached only by air planes. We can witness greater demand for short term but long-haul trips as modern consumers don’t have time for long term trips but have a great desire to see the world in a short period of time. According to the statistics of 2017, about 8 million foreign tourists (55%) visited Ukraine using air transport. Ukrainians prefer to use automobiles traveling abroad, and only 3.6 million Ukrainian tourists (17%) traveled by air. Five national airlines connected nine major Ukrainian cities and transported about a million (930900) of passengers, exceeding the level of 2016 by 17.6 % [2]. High production costs cause high ticket prices, which, in its turn, restrict usage of air transportation in domestic tourism. If we analyze the level of average salaries in various regions of Ukraine, we’ll get the following figures: The residents of Kyiv have the highest average salaries (13388 UAH), then go Kyiv region (8399 UAH), Dnipro region (8387 UAH) and Zaporizhia region (8336 UAH). The residents of Chernivtsi region (6424 UAH) and Ternopil region (6394 UAH) receive the lowest average salaries. Due to insolvency of the residents, the only appropriate solution can be offering budget flights by low-cost companies, which can result in higher demand [3]. It should be noted, that air tickets became affordable for an average national passenger after arrival of Wizz-Air, the first low-cost airline, in 2008. The other low-cost airlines soon followed the pioneer. In addition, traditional airlines began to offer seasonal and other discounts. Such changes drew air transport closer to potential passengers and increased its competitiveness. At the moment the market of self-sufficient domestic air transportation is just being formed, as majority of “domestic” passengers are just “international” Ukrainian passengers traveling through Boryspil International Airport. The factors which substantially restrict formation and development of domestic passengers’ transportation in Ukraine are as follows: airlines have difficulty in expanding and upgrading the fleet of air planes and their infrastructure is at very low level. 33.5 The research has demonstrated that even when residents of quite a lot of Ukrainian towns have a desire to fly, they don’t have a physical possibility to do it. Since 2016 and up to now aircrafts have not been constructed in Ukraine. Ukrainian airlines can’t afford to buy an aircraft, as a new aircraft costs $50-100 million. A 10-year-old Boeing 737-800 costs $22-30 million. The only solution for national airlines is to lease air carriers, which is a common practice all over the world, but they cannot implement such a practice widely. According to leasing agreement the company should pay about $50.000 per month for a 25-year-old carrier or $150.000 for a 10-year-old carrier or $250.000-300.000 for a new one. In 2018 18 Ukrainian airlines transported both inbound and outbound tourists to 43 countries and 27 foreign airlines transported them to 27 countries. Some new companies started their operations in Ukraine; they are “Qatar Airways” from Qatar, “Ernest SpA” from Italy and “Kish Air” from Iran. National airlines transported 5.837.500 passengers, foreign airlines transported 4.975.800 passengers. State Aviation Administration of Ukraine informs that five leading market players carried out 93 % of general amount of air transportation. They are WINDROSE, UIA, ATLASGLOBAL, Bravo Airways, AZUR AIR UKRAINE [2]. General passenger traffic through the Ukrainian airports increased by 25 % in 2018 and reached the number of 20.550.000 people. The largest growth of passenger traffic was observed in the sphere of international charter flights [2]. Ministry of Infrastructure has initiated renovation of regional and local airports due to recent growth of passenger traffic, which can result in wider geography of flights and possibility to encourage low-cost airlines to use local airports. At the moment 19 airports and airfields in the country organize and coordinate commercial flights of both national and foreign airlines. Volodymyr Omelyan, Ukrainian Minister of Infrastructure, pointed that one of the main tasks in the near future for Ukrainian infrastructure is construction of modern airports and renovation of existing ones. The program dealing with development of local airports has been developed, and negotiations with foreign investors concerning new funding are going on. So far, Ukrainian aircraft market is starting its revival after a recent period of decline. By the beginning of 2018 66 intergovernmental agreements which regulate air transportation to different countries of the world have been activated. 33.4% of these agreements provide liberalized air transportation with such countries as the USA, the United Arab Emirates, Spain, Italy, Greece, Poland etc. The agreements which remove restrictions concerning the number of Ukrainian airlines make up 77.3 % [2]. Conclusion: Aviation and tourism influence each other considerably and in various ways. Air transportation has direct impact on international tourism development in Ukraine. Air transport has the best perspectives for development, as in our modern globalized world economic activities of population are concentrated on the possibility to move long distances to various destinations. Tourism, in its turn, encourages development of air transportation and reveals key problems that should be investigated and solved, which will result in sustainable development of both leading industries. 33.6 References 1. Балабанов Г.В., Ткачук Л.М. Аналіз процесів взаємодії у системі авіація- туризм / Г.В. Балабанов, Л.М. Ткачук // Науковий вісник Інституту міжнародних відносин НАУ. – 2010. – Том 1, № 1(2010). – с. 183-190. 2. State Aviation Administration of Ukraine. - Retrieved from: http://www.avia.gov.ua 3. State Statistics Service of Ukraine. – Retrieved from: http://www.ukrstat.gov.ua. 4. Дудник І.М. Вступ до загальної теорії систем: Навчальний посібник /І.М.Дудник – К.: Кондор, 2009. – 205 с. 5. Марінцева К.В. Актуальні напрямки наукових досліджень авіатранспортних систем /К. В. Марінцева// XXVIII МНПК «Перспективные направления отечественной науки». – Retrieved from: http://nauka.zinet.info/28/ Marintseva.php 33.7.