Sanctions on Russia for Ukraine War could reorder global aviation

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/>