Letter from... Russia

Moscow's City Government is considering launching a $1.4bn air taxi scheme using eight-seat light passenger aircraft and helicopters to provide transport services within a 500km range of the Russian capital.

Existing commuter demand from businesspeople, tourists and corporate clients would generate 1.5bn euros ($1.84bn) per year, with intracity travel accounting for 55% of that amount, Moscow City Government claims, citing recent market research.

The Moscow region has an area of 1,000 square kilometres, and many of the small villages in the region now contain compounds full of new cottages for the super-rich.

'It will cost from $75 to $150 to travel by air taxi. When this project reaches its full capacity, air taxis will depart from the MKAD (Moscow Ring Road) intersections every five minutes,' says Moscow's vice mayor, Valery Shantsev.

The service will be run from several locations around the capital's outer ring road, including Vnukovo airport and possibly including other airfields such as Myachkovo, currently a general aviation centre, and Bykovo airport.

The plan is contingent on Moscow finding private investors willing to finance construction of the necessary infrastructure. The system is likely to be based around the dedicated business terminal at Vnukovo airport, which now handles 450 flights a month, up from 70 a month three years ago.

When the plan is further developed an air taxi operator will be set up in 2005. Moscow Government will have a blocking 25% stake in the new firm.The city has also designated Atlant-Soyuz, an airline in which it has a blocking share, as the chief carrier for the proposed service.

The City Government plan does not yet specify which aircraft might be considered for the service, but it has examined the Mil Mi-34 and Kamov Ka-226 helicopters, and the Myasishchev M-101 turboprop, as well as the Cessna Caravan-675, Dassault Falcon 20 F-5 and Eurocopter AS355N.

'We are looking at six to eight seat aircraft,' Shantsev says.

One obstacle to the plan which must be resolved is air traffic control - currently, general aviation flying in Russia is governed by the same restrictions as commercial aviation, with mandatory flight plans 24 hours before take-off, and military supervision of air traffic control. Moscow Government is already in negotiations with the air force on the issue, according to deputy mayor, Iosif Ordzhonikidze

Regulations on flights over Moscow, which are currently banned for security reasons, are also under review, says lieutenant-general Mikhail Kizilov, head of the Air Force's air traffic control department.

'We understand how this could technically be achieved. We are ready to work out routes that would be safe,' Kizilov says. 'We... will not be a stumbling block on this issue.'

The City Government has allocated 27m roubles ($964,000) for a preparatory programme for the air taxi scheme to resolve issues like flight clearance arrangements with the Defence Ministry, a list of aircraft for the fleet, the design of air taxi airports and proposed locations in Moscow and near the city, and incentives for investors.

Moscow's traffic problems have become much worse over the last 10 years as the increasingly affluent population buys more cars. The number of cars on the capital's streets is estimated to have increased annually by 10% in the last five years, and rush-hour traffic jams regularly bring the city to a standstill.

The idea of using helicopters for commuting is not unusual in Russia - during the Soviet era, schoolchildren and oil workers in the far north and Siberia were often flown in and out of remote settlements where there were no roads. Government subsidies and cheap jet fuel made flying available to almost anyone.

Nowadays, most citizens of the capital are more concerned with the price of public transport, which went up from seven roubles to 10 roubles a ride last year and increased again over the new year.

Providing special transport for the privileged few is another Soviet-era tradition that has carried over to the new Russia. Government officials have special blue flashing lights and sirens on their cars and use a central lane closed to normal traffic. They are waved through red lights by the traffic police.

Howard Gethin is a business journalist based in Moscow.