Russia’s state aviation authority on Saturday recommended Russian airlines with foreign-leased aicraft to suspend flights of passengers and cargo abroad from Russia from March 6 and from foreign countries to Russia starting on March 8. The European Union, Britain and United States and some other countries closed their airspace starting next week, part of a package of punitive measures after Russia invaded Ukraine. Russia calls its actions in Ukraine a “special operation.” <br/>
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Banned from swaths of the world’s skies, denied access to vital spare parts, stripped of insurance and battling to keep hold of planes, Russia’s aviation industry has in the space of a week been plunged into its gravest crisis in decades. Western governments have unleashed waves of sanctions since Vladimir Putin sent troops into Ukraine late last month, but few have delivered such a visible punch as those targeted at an industry that accounted for 6 per cent of the world’s airline capacity last year. Flag carrier Aeroflot, which took delivery of its first western aircraft from Airbus when Boris Yeltsin was in the Kremlin, on Saturday announced it would stop all international flights other than to Belarus. S7, Russia’s second-largest airline, has also scrapped flights outside domestic airspace. The industry’s mushrooming crisis is “unprecedented, unpredictable and unforecastable,” said Max Kingsley-Jones of Ascend by Cirium, the aviation consultancy. With no clarity on how long the sanctions from US and EU authorities will remain in place, experts warned that in a worst-case scenario Russian domestic carriers’ schedules would shrink to levels not seen in three decades. The EU’s sanctions prohibit the sale, transfer, supply or export of aircraft or any components, while the US has introduced export restrictions including on Russia’s aerospace sector. “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,” noted Rob Stallard, an analyst at Vertical Research Partners. Russia’s carriers have been hit just as they were drawing a line under the disruption caused by the coronavirus pandemic. Expectations of a steady and sustained rebound in domestic demand has been replaced, at least for now, by extreme volatility. In a sign of the concern, the US, French and UK governments this week advised their citizens to leave the country while commercial flights were still available. Story has more.<br/>
Russia could allow passenger airliners to be maintained by third-party firms in a bid to help its domestic carriers hit by sanctions over the invasion of Ukraine, Tass news agency said on Saturday. Tass said the Russian transport ministry had drawn up a draft bill to help airlines until September 2022. It would also suspend all planned and unscheduled inspections of carriers, the Russian news agency reported. Boeing and Airbus - the world's two largest aircraft manufacturers - have suspended the supply of components and services to Russian airlines, a move that will likely make it harder to maintain planes. The bill would allow "the repair of aircraft and the replacement of components by third-party companies, as long as they meet the requirements for companies that are involved in maintenance," Tass said. It did not give details. Russian President Vladimir Putin earlier on Saturday said Moscow was in talks with aircraft leasing companies to resolve potential issues linked to sanctions.<br/>
The cost of transporting goods by air has surged since Russia’s invasion of Ukraine last week, just as consumers are already grappling with the fastest pace of inflation in nearly 40 years. Carriers, including KLM Royal Dutch Airlines and United Parcel Service, are filling their planes with pricier fuel for longer Asia routes to avoid Russia due to airspace closures. Jet fuel prices in the United States this week hit the highest in more than a decade. The US on Tuesday joined Canada and much of Europe in barring Russian aircraft from its airspace. In January, more than 2,500 flights that departed the US used Russian airspace, while 493 flights from Russia used US airspace, according to aviation data firm Cirium. “With the uncertainty of Russian airspace restrictions to civilian aircraft, UPS decided on Mar. 1 to avoid use of Russian airspace for our Northern Pacific (NOPAC) operations until further notice,” UPS’ pilots union told aviators Wednesday. Higher transportation costs are likely to get passed along to consumers as it gets pricier to ship everything from manufacturing components to perishables like imported cheese and fruit. Commodity prices from wheat to aluminum are already spiking. The US ban of Russian aircraft included cargo giant Volga-Dnepr, which flies large aircraft pieces like wing parts for some Boeing jets. “We work closely with our wide range of supply chain and logistics partners to manage through any potential impacts,” the aircraft manufacturer said.<br/>
Russia could allow passenger airliners to be maintained by third-party firms in a bid to help its domestic carriers hit by sanctions over the invasion of Ukraine, Tass news agency said on Saturday. Tass said the Russian transport ministry had drawn up a draft bill to help airlines until September 2022. It would also suspend all planned and unscheduled inspections of carriers, the Russian news agency reported. Boeing and Airbus - the world's two largest aircraft manufacturers - have suspended the supply of components and services to Russian airlines, a move that will likely make it harder to maintain planes. The bill would allow "the repair of aircraft and the replacement of components by third-party companies, as long as they meet the requirements for companies that are involved in maintenance," Tass said. It did not give details. Russian President Vladimir Putin earlier on Saturday said Moscow was in talks with aircraft leasing companies to resolve potential issues linked to sanctions. Russia's state aviation authority is recommending that domestic airlines with foreign-leased aircraft suspend passenger and cargo flights abroad from Russia from March 6 and from foreign countries to Russia starting on March 8 to prevent their possible seizure.<br/>
International sanctions triggered by the invasion of Ukraine are poised to derail a Russian effort to challenge Airbus SE and Boeing Co. in single-aisle jets. Irkut Corp.’s MC-21 jetliner, set to enter service this year, had already been hit by delays and cost overruns due to pre-existing sanctions. The plane, which features composite wings and is designed to carry as many as 211 people, is due to commence deliveries to Russian airlines this year, starting with flag carrier Aeroflot PJSC. European aerospace firms are now halting exports and warning of losses on the program due to the imposition of much tougher restrictions following the country’s invasion of Ukraine. US suppliers like Raytheon Technologies Corp., which provides one of two engine choices, haven’t detailed their plans. The MC-21 is the first full-size aircraft designed in Russia since the fall of the Soviet Union more than three decades ago, and represents the country’s bid to break the stranglehold of Airbus and Boeing on the short-haul jetliner market. A version using engines from Raytheon’s Pratt & Whitney division received Russian type certification at the end of last year. But the fresh wave of sanctions unleashed by the Russian war in Ukraine could put the timing of the launch at risk, and potentially throw the whole project into limbo. “It needs to be reinvented and that’s going to take a bunch of years,” said Richard Aboulafia, an aviation analyst with consultancy AeroDynamic Advisory. “It’ll go from an interesting plane to a completely hopeless one.” British aerospace firm Meggitt Plc, in line to supply the wheels and brakes for the MC-21, warned Thursday that it could see a “material” writedown in the next 12 months due to its involvement in the program. A spokesman said the company already ceased all import and export shipments with Russia. <br/>
Credit cards issued by Russian banks using the Visa and Mastercard payment systems will stop functioning overseas after March 9, Russia's central bank said on Sunday, adding that some local lenders would look to use China's UnionPay system instead. Russian-issued Mastercard and Visa cards would be accepted within Russia until their expiry, the bank said. The overseas ban also applies to cards issued by local subsidiaries of foreign banks, the bank said. Its announcement came after US payments firms Visa and Mastercard said they were suspending operations in Russia, joining the list of companies that are severing business links with Russia. The central bank added that many Russian banks plan to issue cards using UnionPay, a system it said was enabled in 180 countries. While several Russian banks already use UnionPay, others including Sberbank and Tinkoff could start issuing cards co-badging Russia's domestic Mir payments system with UnionPay, it added. Thousands of Russians, including holidaymakers, are stranded abroad after many countries closed off their airspace to Russian aircraft while Russia has retaliated with flight bans for many foreign airlines. The central bank advised citizens currently overseas, to withdraw cash before the ban came into force.<br/>
Dassault Aviation will stop selling business jets to Russian clients on sanctions lists, dealing another blow to air travel in the country. The French manufacturer of the Falcon family of private aircraft is combing through its customer lists to pull any that come under the economic measures, CEO Eric Trappier said Friday at a press conference outside Paris. “We have in our order books a certain number of jets for Russians and we’re studying case by case how sanctions would be applied,” he said. “We’ll freeze those contracts.” Dassault’s move comes as a flood of companies and organizations cut ties to Russia in the wake of the invasion of Ukraine and ensuing sanctions against banks, firms and oligarchs. The Russian airline industry has been isolated by the war as flag carrier Aeroflot is banned from entering European Union, Canadian or US airspace and from using the world’s biggest ticket booking companies. “We have clients in Russia and there are Falcons flying in Russia,” Dassault’s Trappier said Friday. “We’ll face an impact and it’s not good news.”<br/>Sales related to Russia tend to be for higher end models like the Falcon 8X that have a longer range because the country is vast, he said. <br/>
US airlines counting on rejuvenated demand for spring and summer travel as the coronavirus wanes now face a new setback as Russia’s attack on Ukraine pushes jet fuel prices to multiyear highs. Carriers could reveal reductions in planned flying as they update financial guidance at industry conferences in the coming weeks, Conor Cunningham, an MKM Partners analyst, said in a note Friday. The blow may be softened as tightening supply makes it easier to boost fares, he said. The Russian invasion of Ukraine has battered global oil markets, and fear of a supply shortage has pushed up prices. Fuel and labor are the largest costs for airlines, and spot jet fuel prices in New York harbor soared to $3.56 a gallon Friday, up 30% this week to the highest level since 2008. “The question now is which airline will blink first when it comes to capacity cuts,” Cunningham said. “Even if it is just a select few to slow capacity adds, we expect pricing to steadily improve on those actions” along with increased international and corporate travel in Q1. He expects second- and third-quarter flying to be “modestly reduced.” American, Southwest and Alaska Airlines likely will make cuts, he said. International flying, which hasn’t fully recovered from 2019 pre-pandemic levels, is more likely to be trimmed. American has added back capacity sooner than rivals during the pandemic, and Cunningham said United and Delta are unlikely to announce US reductions as they continue rebuilding their networks.<br/>
South Korea’s aviation industry is set to take another hit after years of pandemic losses, as oil prices are soaring amid the escalating Ukraine conflict, driving up their fuel prices and operating costs overall. According to the air industry on Thursday, Brent crude oil jumped $5.93 to $111.19 per barrel on Wednesday night, its highest level since July 2014. The reason behind the price increase is due to the high possibility that Western countries including the US could impose sanctions on oil produced in Russia. Canada, for instance, was on Monday the first in the world to announce it will ban imports of Russian oil on Monday. Sanctions on Russia could cause a permanent shortage of crude oil supply, as Russia is the third-biggest crude oil producer and the second-biggest exporter globally, supplying around 5m barrels a day around the world. Thus, air carriers with around 30% of their operating expenses spent on oil have a new imminent concern on hand. In the case of Korean Air, they use around 33m barrels of oil in a year, which means that a dollar increase per barrel would alter around $33m in profit and loss. Following the increase in crude oil prices, air carriers have decided to increase fuel surcharges on flights. Starting this month, the surcharge for one-way tickets on international routes ranges from 18,000 won ($15) to 138,200 won, depending on the route. The amount is up four levels from the band of 10,800 won to 80,400 won last month. Fuel surcharges have also been raised on domestic routes from 5,500 won to 8,800 won. “International oil prices increasing when we are already not able to operate flights properly due to the prolonged COVID-19 situation is bound to hurt our sales,” said an industry official.<br/>