Rising fuel prices compound Russian airlines' pandemic woes

Demand for domestic air travel is rising in Russia but not nearly as strongly as fuel prices, squeezing airlines’ still-brittle finances, as competition between carriers helps to rein in fares. Airport fuel prices have returned almost to pre-crisis levels after having fallen close to 2016 levels early last year as airlines grounded their fleets in April during Russia’s first and only lockdown, which ran until June. Passenger flows have gradually recovered since autumn, primarily on domestic flights, though demand remains far from pre-crisis levels and ticket prices are unchanged because of competition between carriers and low customer spending power. “The rise in prices for jet fuel is bad for airlines given the equal prices and reduced demand,” a spokesman for Aeroflot said. Aeroflot said fuel costs tripled from Q2 to Q4 to 15b roubles ($201m). Prices have risen more than 40% since June, the spokesman said. The average fuel price at Moscow airports is almost 70% higher than last May, not far from a peak in 2018-19, according to Refinitiv data.<br/>