Airline Industry Draws Attention to Russia-Related Risks After Ukraine Shutdown | Money

On Thursday, Ukrainian forces were battling Russian invaders from three sides after Moscow unleashed the biggest attack on a European state since World War II. ―Photo Reuters

NEW YORK, Feb. 26 – Anchorage Airport in Alaska says airlines have started inquiring about capacity in case routes over Russia are affected due to the Ukraine crisis, a sign of growing fallout from the conflict for the global aviation industry.

The airport was a popular refueling hub for long-haul flights during the Cold War, when Western airlines were unable to access Russian airspace on routes from Europe to the ‘Asia.

Japan Airlines canceled its Thursday night flight to Moscow, citing potential security risks, while Britain closed its airspace to Russian airlines, including Aeroflot, amid the impact of the conflict on the industry extended beyond Ukraine into Russia.

On Thursday, Ukrainian forces were battling Russian invaders from three sides after Moscow unleashed the biggest attack on a European state since World War II.

Airspace in Ukraine, Moldova, parts of Belarus and southern Russia near the Ukrainian border has been closed as a result, giving airlines a narrower range of route options.

Emirates said it had made minor changes to its itinerary to Stockholm, Moscow, St Petersburg and some US flights affected by the airspace closure, resulting in slightly longer flight times.

OPSGROUP, an aviation industry cooperative that shares information on flight risks, said any aircraft traveling through Russian airspace should have contingency plans in place for airspace closed due to risk. or penalties.

“Russia is unlikely to launch its own sanctions and airspace bans as it would not like to see Aeroflot receive reciprocal bans,” OPSGROUP said. “However, they may react in response to sanctions from other states.”

The governing body of the International Civil Aviation Organization (ICAO), a UN body, will discuss the Ukraine conflict at a meeting yesterday, a spokesperson said.

Germany’s Lufthansa said on Thursday it saw no need to cancel its flights to Moscow.

As airlines assessed airspace risks, they were also hit by a spike in oil prices above $105 a barrel for the first time since 2014 due to the conflict. This increases operating costs at a time when travel demand remains weak due to the pandemic.

Jefferies analysts said European airlines were also likely to suffer a long-term demand hit in light of the dispute, pointing to a 27% drop in travel from the European Union to Ukraine and Russia. over a period of two years after the annexation of Crimea by Russia. in 2014.

Aviation bosses are also worried about the impact on relations with Russian companies. The sanctions could disrupt payments to leasing companies.

Russian companies have 980 passenger planes in service, of which 777 are leased, according to analytics firm Cirium. Of these, two-thirds, or 515 jets, with an estimated market value of around US$10 billion, are leased to foreign companies.

Russia’s domestic market has been among the best performing in the world during the pandemic, with capacity down just 7.5% this week compared to the same week in 2020, according to travel data firm OAG. —Reuters

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