Airspace closures divert airlines and exacerbate cargo transport problems

Airlines and cargo transport companies began to face a sanctions war on Monday that could be prolonged, after the European Union (EU) banned Russian planes from its airspace and Moscow promised to retaliate.

Dozens of flights were canceled or subjected to costly rerouting as the crisis hit airline routes. The change of itineraries meant that the airspace of Kazakhstan registered a tripling of flights to more than 450.

Industry executives said they expected Russia to ban the use of cross-country routes after the EU on Sunday restricted Russian airlines as fighting raged in Ukraine.

On Monday, the Kremlin said there would be a response to Western sanctions against Russia’s aviation industry.

“The guiding principle will be reciprocity and our own interests will be at the forefront of that,” Kremlin spokesman Dmitry Peskov told reporters in a conference call.

Without access to Russian airspace, carriers will have to divert flights south and avoid areas of tension in the Middle East.

Shares of European airlines and airport operators fell between 3% and 6% in early trading, while Finnish national carrier Finnair cut guidance and saw shares fall 23%.

Germany’s Lufthansa said 30 flights to Russia would be canceled this week by parent company and its subsidiaries Eurowings and Austrian Airlines, while Latvia’s AirBaltic said it would extend its suspension of flights to Russia until the end of May.

Lufthansa said its flights from Europe to Tokyo and Seoul would have to make diversions for which the company had obtained the necessary carriage rights.

In Asia, Singapore Airlines announced that it would suspend all services between Singapore and Moscow until further notice for “operational reasons.”

Finnair removed its guidance by 2022, fearing significant loss of business as it uses a route through Russian skies from Europe to Asia from its Helsinki headquarters.

Korean Airlines, Japan Airlines and Japan’s ANA Holdings said they continued to use Russian airspace but had no plans to add flights to Russia or Europe to replace trips canceled by European airlines.

Demand to Japan and South Korea has been very low due to COVID-related travel restrictions.

Airline Swiss, also owned by the Lufthansa Group, said it would continue to fly to Russia as Switzerland has not banned Russian airlines.

supply chain

Airspace closures and flight cancellations will also affect cargo traffic, further exacerbating global supply chain problems caused by the pandemic, which slows the handling of shipments around the world.

“Due to the ongoing dramatic developments in the conflict between Russia and Ukraine, Lufthansa will no longer use Russian airspace,” Lufthansa Cargo noted.

United States-based United Parcel Service Inc and FedEx Corp., two of the world’s largest logistics companies, announced they would suspend deliveries to Russia.

Global aircraft lessors also said they would have to terminate hundreds of aircraft rental contracts with Russian carriers in the wake of EU sanctions that require such deals to end by March 28.

Russia’s Aeroflot said on Sunday it would cancel all flights to European destinations after EU foreign policy chief Josep Borrell said the EU had decided to close its airspace to Russian traffic.

The United States is considering similar action but has yet to make a final decision, according to US officials.