Airlines, Aerospace Caught Up in Ukraine War
Here’s What We Know so Far
Unlike many recent conflicts, Russia’s invasion of Ukraine is directly global affecting airline and aerospace in a way not seen for decades. Retaliatory airspace closures in the West and in Russia will add many hours to flight time to Asia, and so far have effectively cut Russians off from European travel. Sanctions imposed by the G-7 countries and the EU have yet to make themselves fully known, but they may throw Russia’s economy into chaos and will hurt Western economies as the price of energy and some imports soar. The situation is changing by the day, but here’s what we know so far. Check AirlineWeekly.com for the latest updates throughout the week.
- European Commission President Ursula von der Leyen on Sunday said the 27-member bloc will move to close its airspace to Russian airlines and private and charter aviation. The EU’s announcement came after several member states announced airspace closures over the weekend. The EU joins Canada and the UK and several other countries in banning Russian flights. FlightRadar24 data over the weekend showed an Aeroflot Boeing 777 en route to New York turning back to Moscow before entering Canadian airspace.
- Last week, the UK closed its airspace to Russian airlines, and Russia immediately retaliated. British Airways rerouted its Delhi and Singapore flights south to avoid Russian airspace. If Russia bans overflights to all European airlines, it will add significant time to routes to Asia. The silver lining, as IAG chief Luis Gallego noted last week, is that traffic to Asia remains a fraction of its pre-pandemic level. OAG on Friday said flights to Asia could track west over Anchorage or south to avoid Russian airspace. Russia, however, stands to lose out on a lucrative source of revenue in overflight fees.
- Even before the airspace closures, several European airlines said they were halting flights to Russia for the foreseeable future. Lufthansa, Ryanair, Wizz Air, Air France and KLM are among the carriers that had halted flights to the region last week. Russia’s S7 and Aeroflot also halted flights to Europe before the closure.
- Delta Air Lines severed its codeshare agreement with Aeroflot as the conflict escalated last week. As of Sunday, the Russian carrier remained a member of the SkyTeam alliance.
- FedEx and UPS said they will not deliver cargo and packages in Russia.
- The sanctions announced will hit aerospace hard. U.S. President Joe Biden said export controls will make it harder for Russian companies to access U.S. technologies. This may well apply to aircraft, engines, and parts. Sanctions announced by von der Leyen were more direct, barring the sale of European aircraft and parts to Russian companies. The bulk of Russia’s airline fleet is comprised of Boeing and Airbus aircraft, with a few homegrown models thrown in, but even those rely on Western technology.
- Irish media first reported that sanctions may require the country’s lessors to remove aircraft from Russian fleets. Russian airlines would have to return aircraft to EU-based lessors by March 28. Most commercial aircraft in Russia are leased. This could upend the country’s airlines. Russia’s airlines had braced for international sanctions, but the country’s domestic market had been a rare pandemic-era success story.
- The U.S., Canada, the EU, and Japan have sanctioned several Russian banks, and von der Leyen on Sunday suggested Russia’s central bank also will be sanctioned. This could effectively cut Russia off from the global economy.
- Much of the world’s titanium comes from Russia. So far, the country has not interrupted supply, but if it does, it will affect Western aerospace manufacturers. Boeing CEO David Calhoun said earlier this year, before the outbreak of hostilities, that supplies were sufficient for the medium-term, but a prolonged war could make some aircraft components scarce.
- Oil surged past $100 per barrel last week for the first time since 2014 but has since settled back under that threshold. Russian retaliatory sanctions could force the price back up this week. Russia supplies 10 percent of the world’s oil and almost 40 percent of Europe’s natural gas. The Organization of Petroleum Exporting Countries so far has resisted calls to increase production.
- Reports say that shelling destroyed the world’s largest aircraft. The only Antonov An-225 cargo lifter apparently was on the ground at Ukraine’s Hostomel Airport when it came under attack.