• Thu. Aug 4th, 2022

Travel bans and sanctions to compound airline industry woes

ByKimberly A. Brochu

Mar 3, 2022

Russia’s continued invasion of Ukraine will pose significant challenges to the airline industry, which is already reeling from the effects of Covid-19, as countries and brands around the world respond with sanctions .

Countries have blocked Russian flights from their airspace

Russia’s invasion of Ukraine is already having a huge impact on air travel. As a result of Moscow’s aggression against Ukraine, Russia found itself almost completely cut off from European airspace, as the EU banned Russian flights and planes from its airspace. The United Kingdom, Switzerland, Canada and the United States have followed suit. Restrictions on flights will force Russian airlines to take indirect flight paths. Already, an Aeroflot flight to Canada has been forced into an eight-hour “flight to nowhere” after Canada banned Russian planes from its airspace.

The immediate impact is on travelers to and from Russia. However, Russia retaliated by closing its airspace to more than 30 countries, virtually blocking some routes to Asia for some carriers, or forcing costly detours. The sanctions have also caused flight cancellations, just as international air travel is starting to return after the Covid-19 pandemic. Apart from the financial difficulties induced by Covid-19 and the weakening of expenses, the airline industry is still recovering from other profound effects such as the irrevocable change in consumer behavior and higher operational costs due to stricter health and safety measures. The Russian-Ukrainian conflict will only exacerbate the challenges the airline industry is already facing.

The need to circumvent Russian airspace presents additional challenges

Although there are fewer passenger flights between Europe and Asia, as many countries, such as China and Japan, remain mostly closed to foreign visitors, the impact is still substantial. For example, flights from London to Asia now fly much further south to avoid Russian airspace. A flight from Frankfurt to Beijing would need to add around 700 nautical miles (almost 1,300 km) to avoid Russian airspace, while the flight path from Helsinki to Tokyo would be over 2,000 (3,700 km) longer. ), according to a Euronews report. .

Airspace closures are forcing carriers to revise their itineraries, resulting in longer journeys, which consume much more fuel and cost airlines more, at a time when Moscow’s invasion of Ukraine has drives up oil prices, and the climate can ill afford the extra pollution. How long airlines can absorb the additional costs before passing them on to consumers is still a big unknown, however, if the dispute continues, travelers are likely to face higher prices. According to a GlobalData consumer survey, consumers are already concerned about their financial situation, with 85% of respondents worldwide indicating they are either “extremely”, “somewhat” or “slightly” concerned. Rising costs will likely exacerbate concerns and further discourage the resumption of travel.

Stock prices fall

With airspace closures and airlines canceling flights, stock markets have also reacted. Share prices of Russia’s national carrier and the country’s largest airline, Aeroflot, fell 27.9% on Feb. 24, according to Investing.com. Meanwhile, airline group IAG, which owns British Airways, fell 7.7%. European carriers fared slightly better, with Lufthansa shares down 6.9% and KLM down 6.6%. While the effects of Covid-19 seemed to be easing, Russia’s invasion of Ukraine adds to a complex set of issues, bringing volatility and uncertainty. While everyone hopes the conflict in Ukraine will end peacefully and quickly, airlines and travelers will continue to face disruptions until then.

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