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A Sky-High Idea: Profiting From Russian Airspace

One of Russia's best natural resources may turn out to be not what it has under its soil but the airspace over its huge land mass.


According to air traffic experts, if you want to fly from the West Coast of the United States to Japan or from Japan to Europe or from Europe to India, the quickest and cheapest way is across Russian air space.


They say that once Russia realizes its potential as a planetary air highway, it will be able to earn tens of million dollars a year by charging the airlines overflight fees.


"Those routes are as good as real estate," said Dennis Cooper, the U.S. Federal Aviation Authority's representative in Moscow.


For example, Russia offers routes over far eastern Siberia and Kamchatka which could save as much as half an hour on the trip from the United States to Japan, according to Jim Mulhall, director of air traffic systems in the CIS for Delta Airlines.


Though no shorter in distance, the routes sidestep adverse winds which blow in the spring and summer. Traveling across Russia could save airlines tens of millions of dollars and relieve congestion at peak times.


The routes have been open for two years, but in the vast expanses of Siberia, the lack of radar and communications restricts air traffic to a trickle. Airplanes are kept 20 minutes apart instead of the usual 10 and cannot stack on top of one another.


With improved communications and radar, Mulhall said that Russia could earn as much as $22 million a year in overflight rights by increasing the flow.


These ideas have been pipe dreams for several years but it is only over the past few months that Russia has begun the first major investments to tap this potential source of revenue. Russia has recently taken the first small steps, signing a $2.5 million contract with U.S. firm Aeronautics Radio, Inc. to develop the Japan-United States routes.


Russia has also signed contracts with Swedish and Spanish air traffic systems firms which will help to create completely new routes linking Europe with Japan by a route over Russia's Far North, and Europe with India across Ukraine and southern Russia.


The new activity has been triggered by the first serious restructuring of Russia's air traffic control system, begun in May, which promises an end to the confusion which has wracked the whole air transport industry since the end of the Soviet Union.


Under the reforms, the government created a single independent air traffic control regulator, Rosaeronavigatsiya, giving it the exclusive right to negotiate transit agreements with airlines, collect overflight fees and finance improvements in the system.


Boris Mikhailov, deputy director of Rosaeronavigatsiya, said in an interview that the reform creates the basis for major investments in world-standard air traffic technology. "It creates the possibilities for a sort of Klondike," he said.


Mikhailov said that the cost of developing the new transit routes could run as high as $246 million. He also warns that Rosaeronavigatsiya has not yet perfected the system for collecting overflight charges which will pay for this investment. But he said that, once Rosaeronavigatsiya starts collecting overflight charges, the revenues will be large enough to pay for both the development of new routes and a major upgrade of the whole air traffic control system.


Mikhailov frankly admits that 40 percent of Russian air traffic control equipment is now past its useful life. Russia, he admits, does not meet many international air traffic control standards.Luckily, Mikhailov said, domestic air traffic has fallen by about 25 percent over the last year alone, relieving much of the strain.


But the revenue from opening up new air routes offers Russia one chance to leap from a state of decay and backwardness into the forefront of world air traffic technology.


For example, U.S. aerospace firm Rockwell International has hatched a unique project to use two satellite systems, originally developed by the U.S. and Russian air forces to track military aircraft, to handle traffic on the Far East Siberian route.


The United States recently allowed civil aircraft to use its GPS military tracking system. Rockwell's project would allow jets traveling from the United States to Japan to receive signals and be tracked by both the U.S. system and Russia's GLONASS.


The air routes over the huge empty spaces of the Russian Far East, inaccessible to radar and radio, could be the ideal testing ground for a civilian application of these two former adversary spy networks.

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