The airspace closure will divert airlines to detours and increase cargo problems
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HELSINKI, Feb 28 (Reuters) – Airlines were preparing for possible long sanctions on Monday after the EU banned Russian airlines and Moscow promised to respond.
Dozens of flights were canceled or sent to expensive detours when the crisis hit airline stocks.
As a result of rerouting, the number of flights in Kazakh airspace tripled to more than 450. Read more
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Airline executives said they expect Russia to ban the use of their cross-country routes after the European Union banned Russian airlines on Sunday as fighting raged in Ukraine.
On Monday, the Kremlin said sanctions against the western Russian aviation industry would be met.
“The guiding principle is reciprocity, and our own interests are at the forefront,” Kremlin spokesman Dmitry Peskov told reporters in a conference call.
Without access to Russian airspace, airlines must steer flights south and avoid tensions in the Middle East. Read more
The shares of European airlines and airport operators fell by 3-6% at the beginning of trading, while the Finnish national airline Finnair cut its guidelines and the shares fell by 23%.
German Lufthansa (LHAG.DE) said that Lufthansa and its subsidiaries Eurowings and Austrian Airlines will cancel 30 flights to Russia this week, while Latvia ‘s AirBaltic has announced that it will continue to suspend flights to Russia until the end of May.
Lufthansa said its flights from Europe to Tokyo and Seoul would have to fly detours for which the company had secured the necessary flight rights.
Asia Singapore Airlines (SIAL.SI) said on Monday it would suspend all connections between Singapore and Moscow for “operational reasons” for the time being.
Finnair abandoned its 2022 guidelines for fear of a significant loss of business when using the route across the Russian sky from Europe to Asia via its Helsinki hub.
Korean Air (003490.KS)Japan Airlines (9201.T) Japanese ANA Holdings said Monday it would continue to use Russian airspace, but had no plans to increase flights to Russia or Europe to replace flights canceled by European airlines.
Demand in Japan and South Korea has been low due to travel restrictions related to the COVID virus.
Airline Swiss, owned by the Lufthansa Group, also announced that it will continue flying to Russia because Switzerland has not banned Russian airlines.
INCREASES SUPPLY CHAIN DISORDERS
Airspace closures and flight cancellations also affect freight traffic, further exacerbating global supply chain problems caused by the pandemic slowing down cargo handling worldwide.
“Due to the continuing dramatic development of the conflict between Russia and Ukraine, Lufthansa will no longer use Russian airspace,” Lufthansa Cargo said.
United Parcel Service Inc (UPS.N) and FedEx Corp. (FDX.N)two of the world’s largest logistics companies said they were suspending supplies to Russia. Read more
Global aircraft lessees also said they would have to terminate hundreds of air lease agreements with Russian airlines due to EU sanctions requiring such agreements to expire by 28 March. Read more
Russian Aeroflot (AFLT.MM) announced on Sunday that 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 not yet made a final decision, according to U.S. authorities.
The U.S. government said on Sunday that citizens should consider leaving Russia immediately on commercial flights as more and more airlines cancel their flights as countries close their airspace to Russia. L1N2V307H
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Reported by Anne Kauranen in Helsinki, Maki Shiraki in Tokyo, Joyce Lee in Seoul, Aradhana Aravinda in Singapore and Ilona Wissenbach in Berlin; edited by Jason Neely
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