KIEV (Reuters) - Ireland’s Ryanair will launch its first routes from European cities to Ukraine, the low-cost airline said on Friday, rekindling a deal it walked away from last July over alleged attempts to protect the market for Ukrainian competitors.
The collapse of the previous agreement highlighted the power of vested interests in Ukraine, where the government has vowed to tackle endemic corruption in exchange for a $17.5 billion bailout deal from the International Monetary Fund.
Ukrainian President Petro Poroshenko and Ryanair Chief Executive Michael O’Leary announced the deal at a briefing at Kiev’s Boryspil airport, which will have 10 Ryanair routes, while the western city of Lviv will have five.
“This is a sign of quality - the quality of the investment climate and the quality of competition conditions,” Poroshenko said.
Soon after Ryanair canceled the deal last year, Prime Minister Volodymyr Groysman called for talks to be restarted and asked Ukraine’s anti-corruption and anti-monopoly bodies to examine if the previous negotiations had been carried out fairly and in compliance with competition laws.
The authorities have been at pains to show that Ukraine is open for business after the 2013/2014 pro-European uprising, but efforts to attract foreign investment have been hampered by lackluster progress on fighting corruption.
Last year, Ukrainian International Airlines (UIA), which is part-owned by tycoon Ihor Kolomoisky, denied it had been lobbying to prevent a deal between Ryanair and Boryspil airport.
The new agreement will likely be welcomed by many within Ukraine as it will provide more and cheaper routes to European destinations at a time when a new visa-free regime with the European Union has simplified travel for Ukrainian citizens.
The Kiev routes will be to Barcelona, Bratislava, Gdansk, Krakow, London, Poznan, Stockholm, Vilnius, Warsaw and Wroclaw. The Lviv routes will be to Duesseldorf, Krakow, London, Memmingen and Warsaw.
Writing by Alessandra Prentice; Editing by Matthias Williams and David Evans