Businesses warn of airlines halting operations and defense contracts being disrupted

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Industry associations are calling for a review of the new rules for reserving employees. They predict a loss of specialists, a halt to production, and contracts being disrupted.

Industry associations continue to call on the Government to review its decision to change the reservation rules, which has sparked serious debate. The government initiative could lead to the loss of critically important specialists, the suspension of operations at individual enterprises, and the disruption of contracts. Representatives of the Ukrainian Air Transport Association (UATA) and the Federation of Employers of Ukraine warn of this, UNN writes.

UATA warns of the threat of Ukrainian airlines being forced to suspend operations

The Ukrainian Air Transport Association has appealed to Ukrainian Prime Minister Serhii Koretskyi over the risks that changes to the procedure for reserving military-liable employees pose to the aviation industry.

In its appeal of October 15, which is at UNN's disposal, UATA emphasizes that the current reservation limit of 50% of military-liable employees already significantly restricts the activities of airlines. The introduction of additional limits, which could result in individual specialists losing their reservations, threatens not only the operation of enterprises but also the state's economic and strategic interests.

The Association explains that aviation-industry employees are not interchangeable. Pilots, engineers, and technical specialists must have the appropriate training, valid certificates, authorizations, and experience working with specific types of aircraft, and training such personnel requires years and significant financial investment.

The loss of even one certified specialist makes it impossible to form a crew, carry out mandatory maintenance, or operate flights. At the same time, it is impossible to compensate for the staff shortage by increasing the workload of other employees without violating aviation-safety requirements.

In addition, UATA reminds that civil and military aviation are interconnected, as they share the same engineering, maintenance, and technological competencies. Therefore, preserving the staffing potential of civilian enterprises is also important for meeting the state's defense needs and fulfilling government orders.

There is no need to destroy what works: the Aerospace Association warns of risks to the aviation industry due to changes to the reservation rules15.10.26, 13:58

The Association emphasizes that it supports combating abuses in the reservation process, but calls on the Government not to equate fictitious employment with preserving the actual production capabilities of critically important enterprises.

According to the association, the unpredictability of the reservation rules increases the risk of personnel outflow and the transfer of Ukrainian aviation specialists to foreign employers. This primarily concerns specialists who are already working abroad, where Ukrainian airlines continue to transport passengers and cargo.

In this case, Ukraine risks losing not only individual employees, but also established professional teams, experienced instructors, and staffing potential, without which the rapid restoration of air links will be significantly more difficult. Therefore, according to UATA, the possibility of restoring civil flights in Ukraine after the airspace is opened depends on the issue of reserving aviation-industry employees.

New restrictions will exacerbate the aviation industry's existing problems

The new reservation rules could become another blow to an industry that is already operating under extremely difficult economic conditions. As noted in UATA's appeal, airlines have already faced an additional monthly financial burden following the Government's change to the procedure for financing nationwide expenditures on aviation activities.

In addition, since 2024, the State Tax Service and the Bureau of Economic Security have changed their approaches to interpreting the taxation of lease payments that Ukrainian airlines make to non-residents for the use of aircraft. This has intensified pressure on the aviation business.

Against the backdrop of these problems, according to UATA, additional reservation restrictions could lead to the cessation of operations by a number of Ukrainian airlines.

At the same time, the Association reminds that even with the airspace closed to the civil aviation sector, it continues to generate revenue for the state budget. In 2022–2025, Ukrainian aviation enterprises paid almost UAH 27 billion in taxes and fees. Companies continue to carry out international transportation and specialized aviation operations abroad, ensuring the export of services and foreign-currency revenues for the budget.

The association also draws particular attention to the participation of Ukrainian air carriers in international humanitarian missions, including UN operations, cargo transportation, and aerial firefighting. The loss of qualified personnel could jeopardize the fulfillment of these international contracts. As a result, Ukrainian companies could be replaced by foreign competitors, while returning to international markets would require considerable time and resources. 

The Federation of Employers warns of the risk of defense contracts being disrupted

The Federation of Employers of Ukraine also issued similar warnings regarding the government initiative. In an appeal to President Volodymyr Zelenskyy, which is in the possession of UNN, the FEU called for preventing the reduction of reservation quotas for employees of critically important enterprises in the defense-industrial complex from 100% to 85%.

The appeal was supported by leading associations of defense-industrial enterprises, which, according to the document's authors, represent more than 97% of the sector's enterprises.

Representatives of the defense industry emphasize that the proposed quotas will have far more serious consequences than a reduction in the number of employees. The point is that defense production depends on the coordinated work of highly qualified specialists who cannot be quickly replaced. This concerns not only designers, technologists, engineers, machine-tool operators, and welders, but also employees responsible for procurement, logistics, financing, and the fulfillment of international contracts.

The loss of even one such specialist could halt the technological process, disrupt industrial cooperation, or jeopardize the fulfillment of the state defense order.

The Federation of Employers points out that some enterprises have increased their defense-product output four- to eightfold, and in some cases by more than 16 times. According to them, the growth in production significantly outpaces the increase in staff numbers. For example, there were cases when output increased 16-fold while the number of employees grew only 2.4 times. This indicates the high dependence of defense production on established teams, accumulated expertise, and well-established technological processes.

Therefore, an administrative 15% reduction in reservation opportunities could lead not to a comparable decrease in production volumes, but to a halt in production.

Such decisions could be particularly dangerous when defense-industrial enterprises operate in several shifts, compensate for forced downtime caused by air-raid alerts, and must fulfill state contracts within specified deadlines.

Business warns that the new reservation rules could damage the defense industry, energy sector, economy, and food security14.10.26, 15:01

The Federation of Employers also emphasizes that the potential mobilization effect of restricting the reservation of defense-industry employees may prove disproportionate to the losses to the state's defense capability. After all, defense-industry employees account for less than 10% of the total number of conscription-eligible persons with reserved status in Ukraine.

At the same time, the removal of reserved status does not mean an automatic increase in the ranks of the Defense Forces, whereas a reduction in the production of weapons and ammunition will directly affect the provision of military personnel, the Federation emphasizes.

Representatives of the defense industry cite the possible loss of trust among international partners as an additional risk. According to the Ministry of Defense, in 2025, foreign financing of Ukraine's defense industry amounted to $6.1 billion, and the threat of contracts being disrupted—or their actual disruption—due to internal administrative decisions could negatively affect the further attraction of investment funds.

The Coordination Center could create additional risks for businesses

Business representatives are particularly concerned about the initiative to establish a Coordination Center for organizing the reservation of conscripts. Its recommendations will determine whether an enterprise receives critical status and the limits on reserving employees. In the view of business representatives, this creates additional bureaucracy and entails corruption risks.

The UATA points to insufficient clarity regarding the criteria the Center will use for evaluation, the timeframes for reviewing applications, and appeal procedures. Businesses are particularly concerned about the possibility of reviewing an enterprise’s already-granted critical status without a defined list of grounds.

Such uncertainty could lead to the rules being applied inconsistently and create additional administrative obstacles for enterprises.

In view of this, the UATA proposes establishing a special mechanism for reserving conscript employees in the air transport sector that would take into account the specifics of its operations, flight safety requirements, and the need to retain qualified personnel. The Association stated that it was ready to participate in refining the relevant provisions of the Cabinet of Ministers’ resolution.

Parliament is preparing to repeal the Government’s decision.

The Government resolution changing the reservation rules has provoked a significant public response and a wave of criticism from the business community, industry associations, think tanks, and parliamentarians. Following this, at the initiative of Member of Parliament Yaroslav Zhelezniak and 62 other parliamentarians, draft resolution 16160 was registered in the Verkhovna Rada, entitled "On reviewing the decision of the Cabinet of Ministers of Ukraine of October 13, 2026, regarding the limitation of opportunities to reserve employees of critically important enterprises." The MPs called on the Prime Minister to suspend the resolution and hold additional consultations.

However, in response, Prime Minister Serhii Koretskyi stated during Question Time with the Government that the resolution was still being revised. 

"This resolution is currently being processed; it will certainly be revised, adopted, and published. There is no betrayal here. All the details will be provided precisely when they are published and all the relevant decisions are adopted. Therefore, the skepticism currently being discussed in society has no basis. There are no official decisions, so there is nothing to criticize at this point," he said.

Although the Prime Minister attempted to assure the public that critical enterprises in the defense and energy sectors had "nothing to worry about," he overlooked the fate of private enterprises in related sectors, which are no less important for ensuring the state’s resilience.

In the end, MP Yaroslav Zhelezniak reported that the Government had nevertheless removed from the agenda of Friday’s Cabinet of Ministers meeting the issue concerning the resolution on reservations and had agreed to hold additional consultations with business. The question of whether government officials will take into account the concerns expressed by entrepreneurs, industry associations, and analysts remains unanswered.

Reservations under the new system: why the government’s assurances failed to allay the concerns of business and parliament16.10.26, 13:05

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