What Is The Impact Of Ukraine Crisis on Aviation Industry?

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Airlines and the leasing companies that control billions of dolllars’ worth of passenger jets are drawing up contingency plans for a freeze in business with Russia if the standoff on Ukraine’s border boils over into a military conflict, reports 7 News.

Asymmetrical response 

US officials have warned that Moscow could launch an attack on Ukraine after amassing more than 100,000 troops close to its neighbour’s border, with the West preparing heavy sanctions.

Aviation bosses are worried about the impact on dealings with Russian companies. Sanctions could disrupt payments to leasing firms, and any retaliatory move by Moscow to restrict access to Russian airspace might throw east-west trade into chaos.

“We are expecting an asymmetrical Russian response,” said a Western source involved in drawing up scenarios, adding the West was unlikely to restrict its own airspace first.

The vital trade route

Air corridors between parts of Europe or North America and Asia stretch across Russia, making its 26 million square km of airspace a vital trade intersection.

Cargo is particularly active. US carrier FedEx said on Monday it was making unspecified contingency plans.

Without access to Russia’s airways, experts say airlines face having to divert flights south while avoiding areas of tension in the Middle East – adding significant cost at a time when airlines are reeling from the pandemic.

Pushing the economics

According to some reports, the crisis has resurrected the Cold War prospect of European jets heading over North America to refuel in Anchorage, then dropping down to destinations such as Tokyo, pushing the economics of such flights to the limit.

The scenario is a reminder that Russia’s size and position on the aviation map gives it leverage not available to the Soviet Union when economies were less integrated, according to Elisabeth Braw, senior fellow at the American Enterprise Institute.

“So far, Moscow hasn’t threatened to revoke overflight rights, but knows it has a phenomenal weapon at its disposal,” Braw wrote in Defense One last month.

If there is an emergency, we have no choice but to avoid Russia and fly the southern route,” said Yuji Hirako, president and chief executive of All Nippon Airways Co Ltd.

“Since the demand for international flights is so low due to the coronavirus pandemic, we may choose not to fly in the event of an emergency.”

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Source: 7 News

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