It is determined that civil aviation in Ukraine has a number of problems that are the result of a chronic crisis in the deep fields of the industry. It is revealed that the “open sky” policy acts as an incentive to increase competition. The analysis of dynamics of the air transportation market of Ukraine is carried out. The decline in demand for air transportation in Ukraine is considered as a continuation of the negative trends in the national economy. The analysis of the Ukrainian airlines market has showed that the share of 4 leading airlines in the total volume of passenger traffic was almost 93 %. Regular flights between Ukraine and rest of the world were carried out by 9 domestic airlines (to 39 countries of the world) and 35 foreign airlines from 29 countries of the world. The ratio between international and domestic transportations of Ukrainian carriers during the year amounted to 85 % and 15 % in favor of international ones. It was found out that leading aviation carriers do not meet the modern requirements of the world aviation community. The study of the air transportation market in relation to specialization by types of business has revealed that nine major types of air carriers were formed. Functioning of Low Cost business model on the market provides a significant change in the structure of aviation. The main specific features of the stages of development of Low Cost business-model airlines are determined. The analysis of the situation on the air transport market was conducted on the basis of PEST-analysis. Measures that make it possible to intensify the process of development of the market of aviation transportations are listed: renewal of the airport infrastructure; establishment of high technical standards for airplanes and air services; security enhancement; modernization of air traffic control procedures; updating sectoral legislation. The prospects for the development of the air transport market of Ukraine are the creation of new organizational forms that fully meet the requirements of the market. Consolidation can occur in several areas: the formation of a national carrier-flagship, merger with foreign companies or consolidation with domestic players in the market.