Russia's invasion of Ukraine has stalled a travel recovery for airlines and led to a 23% fall in flight bookings within Europe and a 13% fall in trans-Atlantic bookings in the first week, travel data firm ForwardKeys said on Thursday. The data, which compared bookings from Feb. 24 to March 2 to the week before Russia launched what it described as a "special operation" in Ukraine, is an early indicator of consumer confidence for travel heading into the peak summer season. Rising inflation and oil prices are also dampening the economic outlook and carriers including Lufthansa, Qantas Airways and Japan's ANA Holdings have warned ticket prices may need to rise to cover increased costs. The worst-hit destinations in Europe were those in the east closest to the conflict, with Bulgaria, Croatia, Estonia, Georgia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia seeing a 30% to 50% drop in bookings, according to ForwardKeys. Domestic bookings in Russia, which had been one of the world's top performing markets during the pandemic, fell 49%. ForwardKeys VP Insights Olivier Ponti said Russia's invasion of Ukraine had stalled a recovery in bookings that began in January after cases of the Omicron variant of the coronavirus peaked in many countries. But he added the impact on trans-Atlantic travel and western European destinations was so far not as bad as he had feared.<br/>
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Russia published a draft law on Thursday that could prevent its airlines returning leased aircraft, raising the stakes in a showdown with Western finance over $10b of jets. Sanctions imposed after Russia's invasion of Ukraine give leasing firms until March 28 to free themselves from deals with Russian airlines, sparking a game of cat-and-mouse as lenders try to seize back jets - with very little success. Under the proposed law drafted by the transport ministry, Russian airlines will pay leases in roubles throughout 2022. If a foreign lessor terminates the agreement, a special government commission is to decide whether the aircraft can be returned or rule that the aircraft must stay in Russia. "It is a bad offer tied to an even worse offer," said Eddy Pieniazek, head of analytics and advisory at UK-based aviation consultancy Ishka. The rouble has plunged around 30% since Russia sent troops into Ukraine on Feb. 24, prompting sanctions from the West. Leasing contracts are denominated in US dollars, the currency in which the mainly Ireland-based leasing industry usually borrows money and pays for aircraft. If contracts are terminated, an international treaty called the Cape Town Convention calls for airlines to return planes with minimum interference, something Western sources say is not happening though Russia insists the sanctions are improper.<br/>
Russian travelers hemmed in by airspace closures following the invasion of Ukraine are using Serbia as a backdoor route to visit resorts and cities across Western Europe. Seat capacity between Russia and Serbia, where it has longstanding ties, surged by about 50% in the first week of March compared with pre-war levels. Onward travel to countries including France, Switzerland, Italy and Cyprus is up by almost two-thirds, according to ticketing trends specialist ForwardKeys. Aircraft lessor BOC Aviation believes a deadline giving lessors just over two weeks left to end contracts with Russian carriers due to sanctions over its invasion of Ukraine is "unrealistic", a senior executive said on Thursday. "The EU and UK sanctions set, effectively, a deadline of 28 March for termination of aircraft leases, which is frankly an unrealistic timetable for a fleet of approximately 500 aircraft leased into Russia by operating lessors," Chief Operating Officer David Walton told analysts, according to an earnings call transcript. However, he added BOC Aviation would comply with the sanctions and was discussing logistics for the recovery of its planes with customers. Russia published a draft law on Thursday that could prevent its airlines returning leased aircraft, raising the stakes in a showdown with Western finance over $10b of jets. read more BOC Aviation said its 18 planes leased to Russian airlines had a book value of $935m and could also be affected by insurance policy cancellations after Russia's invasion of Ukraine. "The international aviation insurance markets are progressively cancelling certain elements of insurance policies in relation to aircraft located in Russia or leased to Russian airlines," the lessor said in its financial results. "This is a complex and rapidly developing situation that we are monitoring closely."<br/>
China has refused to supply Russian airlines with aircraft parts, an official at Russia's aviation authority was quoted by Russian news agencies as saying on Thursday, after Boeing and Airbus halted supply of components. Russia's aviation sector is being squeezed by Western sanctions over the invasion of Ukraine, with Russia's foreign ministry warning this week that the safety of Russian passenger flights was under threat. Agencies including Interfax quoted Valery Kudinov, a Rosaviatsia official responsible for maintaining airplane airworthiness, as saying that Russia would look for opportunities to source parts from countries including Turkey and India after a failed attempt to obtain them from China. He also said Russian companies were registering their planes, many of which had been registered abroad, in Russia after the U.S. and European Union sanctions on aviation and that he expects some others to be returned to leasing companies.<br/>
China has reportedly refused to supply Russia with aircraft parts, amid a growing list of sanctions — mostly from Western countries — imposed over the invasion of neighbouring Ukraine. Reports from Russian news outlets, including agency Interfax, quotes aviation regulator official Valery Kudinov as saying attempts to obtain parts through China have been unsuccessful. No reason was provided, and China has not publicly commented on the matter. Kudinov adds that Russia will seek out aircraft parts from countries such as Turkey and India. Airbus and Boeing have already suspended the supply of aircraft components to Russia, as part of sanctions over the invasion, which began in late-February. The Russian foreign ministry has previously warned that the safety of passenger aircraft — Russian carriers mostly operate Airbus and Boeing types — was in jeopardy following the sanctions. The latest development also comes as Russia’s transport ministry drafted new legislation outlining conditions for returning leased aircraft to foreign lessors. The proposed legislation also states payments between lessors and lessees will be carried out in Russian currency – the rouble, which has sunk in value against the US dollar since mid-February – in a manner set out by the Central Bank of Russia.<br/>
Russian travelers hemmed in by airspace closures following the invasion of Ukraine are using Serbia as a backdoor route to visit resorts and cities across Western Europe. Seat capacity between Russia and Serbia, where it has longstanding ties, surged by about 50% in the first week of March compared with pre-war levels. Onward travel to countries including France, Switzerland, Italy and Cyprus is up by almost two-thirds, according to ticketing trends specialist ForwardKeys. Belgrade’s neutral stance over the conflict means flag carrier Air Serbia is able to serve Russia even though airlines in the European Union and Russia are barred by airspace bans from flying between the two regions. The operations provide a gateway into Europe for Russians who would otherwise have to detour via Turkey or the Persian Gulf. Air Serbia didn’t immediately respond to requests for comment. The carrier has at least doubled capacity to Moscow and St. Petersburg since the war began last month, even adding a wide-body Airbus SE A330 aircraft previously used for flights to New York, according to a sales agent at Belgrade airport. “We have become a hub, quite unexpectedly,” the agent said, speaking on condition of anonymity. “I don’t feel good about profiting from someone’s misfortune, but this is incredible. Almost all flights are fully booked, and the price of the ticket is no issue.”<br/>
The aviation industry needs to take "urgent action" to align with the world's climate goal, including curtailing growth in air travel and rapidly scaling up use of sustainable aviation fuels, a report on Thursday said. Climate Action 100+, the world’s largest grouping of investors pushing for corporates to move faster on cutting emissions, said the actions were needed to help limit global warming to 1.5 degrees Celsius above pre-industrial norms. CA100+ said it was updating its views on the sector in light of a major report from the International Energy Agency last year which suggested deep cuts in fossil fuel use would be needed to reach the mid-century target. The CA100+ report is expected to inform discussions with company management by its 615 members, which collectively manage more than $65 trillion in assets, ahead of the next season for annual general meetings. On sustainable aviation fuel, the report highlights the need for a "substantial" increase between now and 2030, citing the IEA's analysis that 16% will need to come from advanced biofuels and 2% from synthetic fuels. In 2020, use was below 0.1%. In addition, CA100+ said business travel and long-haul leisure flights needed to be capped at 2019 levels and demand shifted to high-speed rail, where possible, in order to keep emissions at half their projected 2050 level.<br/>
President Joe Biden’s administration will extend a requirement for U.S. airline travelers to wear masks for another month, while working on a policy about how and when to roll back the rule, according to officials familiar with the matter. The federal mask mandate for domestic travel on planes, trains and other transit is set to expire on March 18 and will be extended to April 18, the officials said, speaking on condition of anonymity ahead of an announcement. During the weeks ahead, the Centers for Disease Control and Prevention will work on a revised policy for when, and how, mask rules should be eased on public transportation corridors, one of the officials said. The requirement was imposed in the earliest days of Biden’s administration and has been regularly extended since. The mask rule has been a double-edged sword, particularly in the airline industry. Requiring face coverings has eased fears of infection and helped fuel an airline-travel comeback since carriers lost more than 95% of passengers in early 2020. At the same time, the requirement was a catalyst for an unprecedented rise in violence on flights. Almost three-quarters of the 5,981 unruly passenger reports last year were related to objections to masks, according to FAA data. CDC Director Rochelle Walensky said earlier this month she’d weigh the latest science on masks and transmission, as well as “the frequency that we may encounter a variant of concern or a variant of interest in our travel corridors,” before making a decision. “People rely on those corridors for getting to work and for, you know, other reasons. So, that’s among the reasons that we want to revisit this in a separate way,” she said on March 2.<br/>
Pilots say a Transport Canada backlog is holding up medical certification, leading to months-long delays before they can return to the skies. A significant number of pilots who have been deemed fit to fly by aviation medical examiners have been waiting a year or more to have Transport Canada greenlight their approvals, says Air Line Pilots Association president Tim Perry. "That process is taking nine, 10, 11, 12, 13, 14, 15 months. And that's just ludicrous," he said. "This is affecting pilots' livelihoods." Transport Canada's standard timeline is 40 business days. The bottleneck comes amid a surge in demand for pilots as travel begins to rebound after two years of depressed business due to COVID-19 restrictions. "We're going six months without a return phone call or without a return email. Partly, this is taking too long. And partly, we've got a major issue in terms of information exchange," Perry said. "We do believe that, in part, these things are being held up because Transport Canada is under-resourced." The union, which represents some 6,000 Canadian pilots, has repeatedly raised the issue with Transport Canada and plans to send it and Transport Minister Omar Alghabra a second letter of concern within a week, he said. Transport Canada spokesman Hicham Ayoun says medical certification -- often the final step in a licence renewal, which is required every two years -- usually takes about two months. "However, under the current circumstances, this service standard may experience delays," he said. "High demand for service, increasing medical complexity, and pandemic-related challenges are some of the factors contributing to the delays in service delivery."<br/>
Peru's aviation sector said on Thursday that the country's commercial airline industry faces the risk of running out of fuel in a week due to its stock shortage caused by a prolonged shutdown of a major Repsol refinery. The airline operators union said they are concerned about the country's situation, and asked for "urgent support" from the government to alleviate the shortage. The airport sector added the country could only provide fuel for commercial aviation until March 17. The government suspended maritime loading and unloading of crude oil for Repsol's La Pampilla refinery after a major oil spill in mid-January. At the beginning of February, operations resumed but for only 10 days. read more The Pampilla refinery provides 40% of Peru's fuel supply, according to the company. "As a sector we have been making various efforts in order to ensure that the supply of aviation fuel is maintained," the union said in a statement. Besides the domestic issue, sanctions on Russia's energy exports after its invasion of Ukraine have raised global energy prices and put a spotlight on countries' domestic production capacity around the world.<br/>
The federal government aims to transfer about 30% of operations at Mexico City’s main international airport to a controversial new airport still under construction through fuel incentives and quotas, a top official said Thursday. The construction of the Felipe Angeles International Airport (AIFA) in Santa Lucia is meant to replace a partially built $13b airport on the capital’s eastern flank, which President Andres Manuel Lopez Obrador canceled on the back of a controversial referendum, just weeks before taking office in 2018. The government is discussing possible fuel incentives and airport quotas with state oil company Petroleos Mexicanos (Pemex) and the Treasury to encourage airlines to move their operations from the main Mexico City airport to AIFA, Rogelio Jimenez Pons, deputy transport minister, told local media El Financiero. Airlines will not be forced to move operations, Jimenez Pons said. Authorities calculate that 30% capacity from the Mexico City airport can be transferred to the new facility located in Santa Lucia over the next two or three years. The inauguration of the new airport is scheduled for March 21.<br/>
Airlines and airports called Friday for an end to pandemic measures for European domestic flights as most countries in the region begin to relax requirements to present proof of vaccination and wear masks. "Covid-19, and specifically the Omicron variant, is now pervasive throughout all of Europe, and population immunity is at such levels that the risk of hospitalisation or death has dramatically reduced, especially for vaccinated people," said joint statement from ACI Europe and IATA. ACI Europe, which represents some 500 airports in the region plus IATA, the top trade association for airlines, noted that numerous countries were now dropping requirements to wear masks in public spaces or present proof of vaccination to enter social events. "As European countries open up and remove restrictions, it is only logical to remove similar restrictions from air transport," they said. Coming two years to the day from when the World Health Organization declared Covid-19 a global pandemic, the trade bodies called for an end to requirements to present negative Covid tests and submit locator forms, as well as wearing masks on flights between European countries which no longer require wearing them inside public places. "This will free people to travel, and support jobs returning to the European air transport and travel sectors," Rafael Schvartzman, IATA's Regional Vice President for Europe, said in a statement.<br/>
Travellers are facing steep air fare hikes and are being urged by industry experts to book early as bans on Russian oil cause jet fuel prices to surge. Qantas CE Alan Joyce has said the average fare would increase by 7% as a result of the increased crude oil prices following Russia’s invasion of Ukraine, but others predict the price rises could be higher. The Brent crude oil price sits at around US$112 a barrel, up from about US$78 a barrel at the beginning of 2022 and marking an eight-year high, according to the Australian Competition and Consumer Commission. The surge follows the US and UK banning oil from Russia – the world’s biggest exporter of crude and oil products combined. For most airlines, fuel makes up 30% to 40% of operating costs. “You don’t have to be a maths expert to know that fuel costs going up by 20% to 30% will hurt a lot,” Prof Rico Merkert, chair of transport and supply chain management at the University of Sydney’s Business School, told Guardian Australia. If Europe follows the US’s tough stance on Russian oil, prices may be pushed higher than $200 a barrel, says Merkert. “This would be catastrophic for airlines.” Ravi Kumar, director of Continental Travels Australia, said in the past, air fare prices have increased between 2% and 5%. The higher the expected increase, the more important it is for consumers to act fast and purchase tickets for travel. Over the last few days, Kumar has observed increases of up to $100 on ticket prices. “Generally we recommend consumers buy tickets early when there is an expected increase in prices,” he said. “We don’t know if it will be a minor increase, or grow to a major increase, but we can expect some jump.” Tom Manwaring, chair of the Australian Federation of Travel Agents, said ticket prices were “coming off a very low base”. “Air fares were already very, very cheap. So now they’ll just be very cheap.” He suggested growing confidence in the market among consumers was the main driver of prices at the moment.<br/>Over the next six to nine months, he expects international carriers will build up capacity, meaning more seats would become available. Story has more.<br/>