• Wed. May 11th, 2022

Airline industry draws attention to Russia-related risks after Ukraine shutdown

  • Anchorage Airport Receives Capacity Inquiries
  • Japan Airlines cancels flight to Moscow due to potential risks
  • Britain closes airspace to Russian airlines

Feb 25 (Reuters) – Anchorage airport in Alaska said airlines had started inquiring about capacity in case routes over Russia were 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. Read more

Japan Airlines (9201.T) canceled its Thursday night flight to Moscow, citing potential security risks, while Britain closed its airspace to Russian airlines, including Aeroflot (AFLT.MM), as the impact of the conflict on the industry stretched beyond Ukraine into Russia.

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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. Read more

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. Read more

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.”

Russia’s aviation authority has said it reserves the right to respond to Britain’s flight ban with similar measures, TASS news agency reported on Friday. Read more

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

Germany’s Lufthansa said on Thursday it saw no need to cancel 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 following 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 longer-term hit to demand in light of the dispute, pointing to a 27% drop in travel from the European Union to Ukraine and the Russia over a two-year period after Russia annexed Crimea in 2014.

Aviation bosses are also worried about the impact on relations with Russian companies. The sanctions could disrupt payments to leasing companies and affect the supply of aircraft parts.

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 $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.

The Biden administration on Thursday announced sweeping export restrictions against Russia, hammering away at its access to goods, including aircraft parts. Read more

The measures, however, include exclusions for technology necessary for flight safety, raising the possibility that the impact on aerospace could be limited rather than drastic.

Eric Fanning, chief executive of the US-based Aerospace Industries Association, said the industry was reviewing export control restrictions and would make necessary adjustments to meet new requirements.

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Reporting by Jamie Freed in Sydney and Allison Lampert in Montreal; additional reporting by Maki Shiraki in Tokyo, Guy Falconbridge in London, Alexander Cornwell in Dubai and Tim Hepher in Paris. Editing by Gerry Doyle

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