At a crossroads: the upcoming vote for Defence City could change the future of Ukrainian aviation

Ukrainian aviation finds itself at a crossroads, where political decisions can either spur growth or condemn it to years of stagnation. The upcoming vote on the “Defence City” bills will determine whether the industry receives the tools for development or loses one of its last chances to maintain the country’s strategic advantage in the sky. Ahead of the second reading of the relevant documents, UNN gathered the positions of people’s deputies on the situation.

DetailsDespite positive signals regarding the inclusion of the aviation industry in the “Defence City” initiative and the announcement by the Committee on Finance, Tax and Customs Policy about lowering the threshold criterion for the share of defense revenue for aviation enterprises to 50%, the situation with the further fate of the industry remains critical and uncertain, as other amendments regarding the possibility of receiving preferences for research and development, technology development, and other components of industry development may not be taken into account.

Among the main points are:

• official inclusion of aircraft manufacturing enterprises in the list of residents according to the government’s already defined list of critically important companies for the economy and defense capability;

• expansion of qualified income criteria to include annual performance and all activities in aircraft manufacturing, maintenance of equipment, engines, and components;

• consideration of the specifics of the wartime economy in tax and contractual obligations; extension of tax and customs benefits to aircraft manufacturing provided that funds are reinvested; introduction of state guarantees and insurance of export contracts;

• directing released funds exclusively to the development of the production base, modernization, research and development work, implementation of new technologies, and personnel training.

“My subjective point of view is that aviation industry enterprises need to be supported, but, as I understand it, this position is currently unlikely to find support in the tax committee. Therefore, I will personally propose changes in the Defence City bills to take into account the aviation industry. Will they be supported? We’ll see,” said Fedir Venislavskyi, a member of the parliamentary faction of the political party “Servant of the People”, head of the subcommittee on state security, defense and defense innovations of the Verkhovna Rada of Ukraine Committee on National Security, Defense and Intelligence.

The MP explains that supporting aviation is of strategic importance for Ukraine, as the loss of the industry would mean abandoning one of the state’s key competitive advantages.

This is one of the potential drivers of our economy. Moreover, Ukraine is among a very narrow circle of countries capable of fully producing aircraft, and the enemy is trying to destroy these capabilities.

A similar opinion was expressed by Fedir Venislavskyi’s colleague from the same faction, Ihor Nehulevskyi.

I will vote for it, it is important now during the war, but also in peacetime they (aviation enterprises – ed.) also needed support

Aviation enterprises should be included in Defence City, criteria need to be softened – Hudymenko11.07.25, 09:48 • 50828 views

The strategic importance of the aviation industry is also emphasized by representatives of other parliamentary factions.

We have good strategic enterprises like JSC “Antonov” and others that work in the field of aircraft construction, and they need to be supported today. Aviation is extremely important for us

It is worth noting that over the past few years, Ukrainian aviation has experienced one of the most difficult periods in its history. The closure of airspace for civilian flights, constant enemy shelling and destruction of infrastructure, relocation of enterprises from frontline regions, and other challenges have virtually put the industry on the brink of survival.

Despite this, the aviation industry maintains its position: it services, modernizes, and equips aircraft for the needs of army aviation and the Air Force, develops and implements new technical solutions that are in demand even on the world market, and implements import substitution. In addition, Ukraine is gradually displacing Russia from the market of aviation services for the UN, and the industry continues to bring significant budget revenues to the state.

These results were made possible thanks to engineering potential, high professionalism of Ukrainian specialists, and tax preferences that had been in effect for over ten years. As of January 1, 2025, these preferences were abolished, and therefore “Defence City” is now considered a key tool that will either ensure the support and development of the aviation industry or, in the absence of proper solutions, lead to its decline.

Commenting on the role of aviation in modern conditions, Petro Pavlovskyi, a member of the parliamentary faction of the political party “Servant of the People”, head of the subcommittee on air transport of the Verkhovna Rada of Ukraine Committee on Transport and Infrastructure, emphasized that the enterprises of the industry are undoubtedly important, but there are many problems in the state that are not given due attention.

There must be deep communication between the executive branch and the management of enterprises, not a superficial approach based on the principle: “Let’s talk, exchange letters – and that’s it.”

In this context, amendments to the “Defence City” bills regarding the support of Ukrainian aviation are an example of practical and effective steps. The issue of including the industry in this initiative remains in the spotlight, but the lack of a consolidated position in the relevant committee and uncertainty with key amendments create a risk that strategic aviation enterprises will be left without development tools. To preserve potential, not only political will is needed, but also legally enshrined decisions that guarantee stable operating conditions, investment protection, and technological progress. How the situation will be resolved remains to be seen.