Sanctions produce 'boomerang effect', Russian-Ukrainian war hits European aviation tourism

Sanctions produce 'boomerang effect', Russian-Ukrainian war hits European aviation tourism

Flight bans, extended routes, increased costs... The blockade of Russian airspace is putting a heavy burden on European airlines. At the same time, the tourism industry, which has just recovered momentum, has once again cast a shadow over it.

The German daily news network reported that European airlines had to detour on routes to and from Asia due to the closure of Russian and Ukrainian airspace. This increases the flight time from Europe to Asia, especially to China, South Korea and Japan.

10% increase in fuel costs, European airlines sound the alarm

The change in route has hit Finnair particularly hard, as the route from Helsinki via Russia is an important part of its business. Topi Manner, chief executive of Finnair, said most flights to Asia were no longer economically viable. According to industry expert Philipp Goedeking, Finnair even faces an "existential threat".

The German Federal Aviation Industry Association (BDL) also warned that the industry will face serious consequences due to the war: "The current developments will have a significant impact on the German aviation industry, the exact extent of which cannot be estimated." At present, the detour has caused Lufthansa every suffered millions in lost sales each month.

The burden on other European airlines is also heavy. As the flight time increases, so does the fuel consumption. That leaves "potentially a 10 percent increase in fuel costs on long-haul routes," Goldkin said. "This has caused enormous harm to airlines and passengers."

Also, Western airlines are particularly affected by having to buy expensive energy now because they are not hedging oil prices. Flights from Europe to Asia with Lufthansa, Air France-KLM or British Airways could become more expensive. "Passengers to the Far East in particular must prepare for higher fares," predicted Samed Kizgin, travel security analyst at German travel security provider A3M. Currently, rising fuel prices worldwide account for 15% to 35% of airline operating costs.

Freight business in trouble, tourism recovery setback again

However, there could be benefits for those airlines that are still allowed to fly over Russian airspace.

"The changing situation is good for Gulf airlines," Goldkin said. Little has changed for Emirates, Etihad Airways and Qatar Airways, which can continue to offer connecting services on their Asian flights. Therefore, these airlines have a clear competitive advantage. However, Kizkin believes that since the aircraft used by Gulf airlines are mainly manufactured by Airbus or Boeing, they may also be affected by sanctions against Russia.

In addition, Turkish airlines with Istanbul as their hub could also be an alternative to Asian flights. "The Turkish Airlines network is becoming more and more attractive," Goldkin said.

In addition to the passenger business, the freight business has also been affected by detours, and it is difficult to adopt the alternative plan of sea transportation. Previously, the new crown epidemic has caused bottlenecks in shipping container transportation, and shipping costs have increased exponentially. Many companies therefore choose air transport. In recent days, a Lufthansa Cargo spokeswoman warned that the aircraft's load capacity could be reduced by 5 to 20 percent due to higher fuel requirements. Therefore, freight prices are likely to rise further.

High aviation costs have also cast a shadow over the newly recovering tourism industry. After two difficult Covid-19 years, European tourism is slowly recovering. Many countries have eased travel restrictions, and bookings for Easter and summer vacations have risen sharply. According to a survey by the German Association for Holiday and Travel Research (FUR) before the Russian-Ukrainian war, 61 percent of Germans planned to travel this year. But now, vacation-hungry people are uneasy about the war images. In addition, Karolina Wojtal of the European Consumer Center in Germany said that consumers may have to bear the cost of flying more expensive, including tickets already booked. (Compiled by Wen Geng, European Times on March 10)