President Joseph Biden’s State of the Union announcement on Tuesday that the US is closing off its airspace to Russian aircraft topped off a week of extraordinary upheaval in global aviation that shows no signs of settling down. The repercussions for the industry have spread far beyond the conflict zone, potentially setting back airlines’ planned recovery from the Covid-19 pandemic by months if not years. With the US airspace closure, which goes into effect on Wednesday, Russian aircraft are prohibited from flying over almost 40 countries, including the 27 members of the EU, the UK, and Canada. Russia retaliated with its own airspace closures, directly affecting Europe-Asia flights. Several carriers, including Air France-KLM, Finnair, and the Lufthansa Group have cancelled flights to North Asia, while flights to Southeast and South Asia are being rerouted to avoid Russian airspace. After an initial suspension, Finnair will resume flying to Tokyo Narita on March 9, but the new flight path adds more than three hours of flying time, the carrier said Wednesday. Currently, traffic to Asia remains depressed due to ongoing Covid-19 travel restrictions. But as traffic between Europe and North Asia recovers, Chinese carriers, not subject to Russian airspace restrictions, could reap a competitive advantage, especially if flight times are significantly shorter on their routes. Finnair and Wizz Air have both warned investors of financial implications from the Russian invasion and subsequent airspace closures. The former, in addition to suspending flights to North Asia, suspended its guidance for the first half of 2022, and CEO Topi Manner said the “situation has a considerable impact on Finnair.” In 2019, nearly half of Finnair’s capacity was flying to or from Asia, per Cirium schedules.<br/>
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Russian aviation veered towards isolation on Wednesday as Boeing and Airbus halted the supply of components and analysts predicted carriers may strip parked planes for parts or be tempted to explore alternative sources to continue flying. Flagship Aeroflot and other carriers faced the Western crackdown as the effects of sanctions over Russia's invasion of Ukraine ripple across the global aviation sector. The United States said late on Tuesday that it would follow the European Union and Canada in banning Russian flights in a move that is likely to trigger Russian retaliation. Boeing said it had "suspended major operations" in Russia, where it also has research and engineering centres. Airbus said it is halting supply of parts and services to Russian airlines but is also analysing whether its Moscow engineering centre could continue providing services to local customers. It did not say what kind of work this might involve. The bans come just as major powers discuss reviving a deal that lifted similar sanctions against Iran, until Washington withdrew in 2018. Sanctions against Russia, which calls its actions in Ukraine a "special operation", will have greater consequences than those on Iran or North Korea, given the size of its market. "With Western lessors also looking to repossess jets that are operated by Russian carriers, the Russian aviation sector is now on a footing that is similar to North Korea and Iran – and similar to where it was under Soviet rule," wrote Vertical Research Partners analyst Rob Stallard. Russia accounted for 6% of airline capacity in 2021, according to consultants IBA. Its airlines have a total of 332 Boeing and 304 Airbus jets, or about two thirds of Russia's fleet, Cirium Fleets data shows.<br/>
Two of the world’s biggest airline ticket-booking systems said they’re evaluating their exposure to Russian customers including Aeroflot in light of sanctions on the country after it invaded Ukraine. Amadeus IT Group, whose ticketing software is used by Russia’s S7 and Ural Airlines, is weighing the potential impact of measures implemented by a growing group of countries in Europe and the US. “We are constantly monitoring the situation, which is evolving rapidly,” the Spanish company said. “We continue to assess and evaluate the potential impact of international sanctions imposed by the U.K., the U.S. and the European Union on Russia and any counter-measures by Russia.” Sabre Corp., which provides software for Aeroflot, said it was monitoring the situation. “We are complying and will continue to comply with sanctions imposed,” the company said, without providing details of its actions. EU sanctions against Russia prohibit “the sale, supply, transfer or export of all goods and technology linked to aircraft, helicopters and spacecraft,” according to Transport Commissioner Adina Valean. Being shut out of online booking software could make it difficult for airlines in the country to continue operating domestically. <br/>
Ambassador Rahm Emanuel on Wednesday called on Japan to consider closing its airspace to Russian planes, following President Joe Biden's announcement on Tuesday night that the US would do the same. "You saw what the president of the United States did. You saw what Europe did, and you saw what Canada did, and I think that sets a precedent," Emanuel said at the US embassy in Tokyo, in response to questions from reporters about whether Japan should also close its airspace to Russian planes. Emanuel commended PM Fumio Kishida for Japan's response to Russia's invasion of Ukraine, such as imposing sanctions on Russian government officials including President Vladimir Putin. "Because of his actions, it is no longer just a European confrontation and standing up, but it's a global confrontation of democracies against autocracies," said Emanuel. Emanuel and Ukrainian ambassador Sergiy Korsunsky spoke to reporters as they jointly lit the US embassy building in blue and yellow, the colors of the Ukrainian flag. Earlier on Wednesday, Korsunsky met with Japanese Foreign Minister Yoshimasa Hayashi to discuss further efforts for Japan to support Ukraine. Hayashi was evasive when he was asked at a separate news conference if Japan intends to impose sanctions on Russian airlines. "To date, decisions have been made based on a comprehensive assessment of the appropriate measures to be taken," he said.<br/>
Asia-based aircraft leasing companies are scrambling to cut ties with Russian airlines under new sanctions triggered by the invasion of Ukraine, in another blow for a sector reeling from the COVID-19 pandemic. The European Union announced new regulations on the weekend that require plane lessors to terminate their rental contracts in Russia by March 28, a move that reportedly could affect more than 500 jets leased to Russian carriers by foreign companies, including dozens of rented planes from companies backed by Asian investors. Japan's SMBC Aviation Capital has the biggest exposure among Asia-based operators with 36 aircraft rented to Russian carriers, or about 11% of its global fleet, according to calculations by research company CreditSights. Most recently, SMBC delivered four new Airbus A321neo jets to Ural Airlines. Parent company Sumitomo Mitsui Finance and Leasing, which put the share of SMBC's fleet with Russian clients at less than 10%, said on Wednesday that it would "negotiate terms with the Russian airlines" to comply with the deadline set by the EU. While the EU sanctions only apply to companies operating in the bloc's member states, many Asian leasing companies, including SMBC Aviation and BOC Aviation, have substantial operating bases in Europe and would be affected by the rules. BOC Aviation, a Hong Kong-listed unit of Bank of China, told Nikkei Asia that it leases 18 jets to four Russian carriers, including Ural, Aeroflot's budget arm Pobeda and Russia's biggest domestic carrier S7 Airlines. The Russian rentals make up about 4.5% of BOC's global fleet, although CreditSights put that figure at 7%, or 23 planes. Timothy Ross, the company's head of investor relations, said the new sanctions would affect "most of our aircraft in Russia," but he declined to elaborate on the potential impact. By Wednesday's midday break, BOC Aviation shares were down 10% from Monday.<br/>
General Electric on Wednesday said it has temporarily paused support of airlines in Russia to be consistent with the sanctions imposed by the United States, the United Kingdom and the European Union. The Boston-based company did not specify what support it was pausing and did not immediately respond to a request for further comment. Its aviation unit designs, produces and services commercial and military aircraft engines, integrated engine components, electric power and mechanical aircraft systems. It said it will continue to operate in compliance with all applicable international laws and regulations. Sanctions over Russia's invasion of Ukraine are causing ripple effects across the global aviation sector. Aircraft and engine manufacturers, lessors and maintenance, repair and overhaul (MRO) providers with Russian clients face various EU and U.S. bans, including on leasing planes, exporting new aircraft and providing parts. <br/>
This year’s Farnborough International Airshow will take place without aircraft, exhibitors or other participants from Russia, following that country’s invasion of neighbouring Ukraine last week. “Following the on-going events taking place in Eastern Europe, we have made the decision to suspend Russian participation at the 2022 Farnborough International Airshow, taking place in July,” the organisers wrote 2 March. “Our hearts go out to the people of Ukraine, and everyone affected by the current situation. We continue to hope for a timely and peaceful resolution,” the statement continues. This year’s Farnborough show takes place from 18-22 July. The event, one of the largest of its kind, was cancelled in 2020 due to the Covid-19 pandemic. This year, the air show is due to go ahead amid declining coronavirus case counts and the relaxing of travel restrictions and of public-gathering caps. In January, Farnborough said 90% of its exhibition space had already been sold, and that the event was on track to be the “most internationally attended event in our history”.<br/>