UTair-Ukraine (Kyiv Boryspil) will suspend domestic Ukrainian operations with effect from next month airline CEO Anatoly Benz has told the Interfax news agency. As a result of the move, the carrier's fleet of five ATR72-500s, bought from ATR - Avions de Transport Régional last year, will be returned to Toulouse Blagnac next month.

Using a reduced fleet of one B737-500 and three B737-800s, UTair-Ukraine will instead focus on the charter market.

Though Benz cited unfavourable operating conditions - depressed demand coupled with high overall cost overheads - for the decision to withdraw, it is believed Ukraine's new legislation restricting the operations of foreign-owned carriers also played a role.

Kiev recently passed legislation preventing carriers whose foreign ownership quota exceeds 49% from being assigned international traffic rights and from operating international charter services. Under the new rules, compliant foreign-backed carriers will only be allowed to enter the international market after they have operated domestically for at least a year. The State Aviation Administration of Ukraine will then allocate international rights based on the frequency of domestic flights the airline operates.

UTair-Ukraine, Atlasjet UA, and Wizz Air Ukraine are the most severely affected by the law.