Russia doubted as growth engine for business aviation

Wed May 22, 2013 3:52pm EDT
 
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* Radical change said needed to fulfill potential

* Taxes, legal issues cited as barriers

* Russian officials say reform to come gradually

By Robert Evans

GENEVA, May 22 (Reuters) - Russia, long touted as an engine of growth for the stuttering global business aviation industry, needs radical changes in its taxation and regulatory system if it is to fulfil that promise, a U.S. expert said on Wednesday.

But the downbeat assessment from Moscow-based lawyer Derek A. Bloom was challenged at the industry's European showcase gathering EBACE by Russian sectoral leaders who argued that reform was coming but could only be achieved gradually.

"Business aviation in Russia has tremendous prospects for growth if the government removes a series of regulatory and tax impediments to the importation and operation of business aircraft," declared Bloom.

Further, the legal system did not encourage confidence among foreign aircraft financiers to extend credit for planes to be used in Russia because of concern - shared by Russian owners - "about selective enforcement of the law," he added.

Ideally, Bloom told an EBACE panel on the issue, Russian authorities should also actively promote the industry - which creates billions of dollars of wealth worldwide in plane-building, selling and support services.   Continued...