×

We've got news for you.

Register on BusinessLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now
Picture: 123RF/aprilphoto
Picture: 123RF/aprilphoto

The fallout to the global aviation industry from Russia's invasion of Ukraine is spreading beyond the airspace closings over the conflict zone as airlines, lessors and manufacturers face up to growing risks of doing business with Russia.

Alaska's Anchorage Airport, a popular refuelling hub for long-haul flights when Western airlines were unable to access Russian airspace during the Cold War, said carriers have started making inquiries about capacity in case routes over Russia are affected by the Ukraine crisis.

Japan Airlines cancelled its Thursday evening flight to Moscow, citing potential safety risks, while Britain closed its airspace to Russian airlines, including Aeroflot.

Ukrainian President Volodymyr Zelenskiy vowed on Friday to stay in Kyiv as his troops battled Russian invaders advancing towards the capital in the biggest attack on a European state since World War 2.

Airspace in Ukraine, Moldova, parts of Belarus and in southern Russia near the Ukraine border was closed when the invasion began on Thursday, giving airlines a narrower range of routing options.

Emirates said it made minor routing changes to Stockholm, Moscow, St Petersburg and some US flights that were hit by the airspace closings, leading to slightly longer flight times.

Opsgroup, an aviation industry co-operative that shares information on flight risks, said any aircraft travelling through Russian airspace should have contingency plans in place for closed airspace due to risks or sanctions.

Similar measures

“Russia are unlikely to initiate their own sanctions and airspace bans as they would not wish to see Aeroflot receive reciprocal bans,” Opsgroup said. “However, they may react in response to sanctions from other states.”

Russia's aviation authority said it reserves the right to respond to Britain's flight ban with similar measures, the Tass news agency reported on Friday.

Flight tracking website FlightRadar24 said British Airways and Virgin Atlantic flights from India and Pakistan to London that normally fly over Russia are now following a southern route that avoids Russian airspace.

The governing council of the International Civil Aviation Organization (Icao), a UN body, will discuss the Ukraine conflict at a meeting on Friday, a spokesperson said.

As airlines assessed the airspace risks, they have also been hit by a spike in oil prices to more than $105 per barrel for the first time since 2014 due to the conflict. That raises operating costs while travel demand remains low due to the pandemic.

Jefferies analysts said European airlines are also likely to take a longer-term hit to demand due to the conflict, pointing to a 27% fall in travel from the EU to Ukraine and Russia over two years after Russia annexed Crimea in 2014.

Aviation bosses are also worried about the effect on dealings with Russian companies. Sanctions could disrupt payments to leasing firms and affect the supply of aircraft parts.

Best performers

Russian companies have 980 passenger jets 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 about $10bn, are rented from foreign firms.

Russia's domestic market has been among the best performers globally during the pandemic, with capacity down only 7.5% this week compared with the same week in 2020, according to travel data firm OAG.

The Biden administration announced major export restrictions against Russia on Thursday, hammering its access to goods, including aircraft parts.

The measures include carveouts for technology necessary for flight safety, raising the prospect the effect to aerospace could be limited rather than sweeping.

Eric Fanning, CEO of the US-based Aerospace Industries Association, said the industry is reviewing the restrictions.

“Notably, we believe that sanctions and export control activities should not hinder the need to maintain flight safety of commercial aircraft,” he said. 

Reuters

subscribe

Would you like to comment on this article?
Register (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.

Commenting is subject to our house rules.