Impact of the ban on airlines around the world

The ban on Russian airspace and Russian airlines will cover the services of airlines around the world. The scope of the economic sanctions on Russia is so large that it is difficult to assess its impact. Russia’s sheer size and close ties to the world’s aviation industry mean sanctions imposed after the Ukraine invasion have affected Iran and North Korea. For airlines such as Aeroflot, Ace Seven and Air Bridge Cargo, these restrictions mean huge losses for companies ranging from aircraft manufacturing to leasing and insurance to maintenance concerns. Apart from this, foreign airlines are being forced to take longer routes due to avoiding Russian airspace. Longer routes mean higher fuel costs and the result is increased ticket prices and freight rates. Read more: Impact on aircraft leases and insurance in the wake of the gas supply war through Ukraine Russian airlines rely heavily on the world’s leasing industry. Airlines are in dire need of modernization of Airbus and Boeing aircraft in their fleet. Russian Airlines has 980 aircraft in its passenger service. There are 6 leases in it.

These statistics are from the analysis firm Sirum. Of these 777 aircraft, 515 are valued at about $ 10 billion and have been chartered from foreign airlines such as Aircap and AirLease. The European Union (EU) has given aircraft leasing companies until March 28 to cancel an agreement signed in Russia. However, the return of these aircraft will also be a major challenge due to restrictions on air travel and difficulties in fast payment transfers. Therefore, there are fears that the Russian government may nationalize the air force in order to maintain its domestic capabilities. Russia’s state aviation authority has ordered airlines that have leased foreign aircraft to stop sending them out of the country. Even if these planes are taken back in a hurry, a large number of them will have to be rented elsewhere. Analysts say this could lead to a sharp drop in rents worldwide. Insurance and reinsurance for Russian airlines have also been cut from the European Union and UK markets. A source in the insurance sector said that it was not clear whether the aircraft would be covered by the insurance company if the lessee could not repay the aircraft.


Generally, insurance has a provision that in case of limitation, the insurance cover will be automatically canceled. Legal action may be required to resolve these issues. Read more: How the Ukraine Crisis Will Affect the Indian Economy Ban on Sales, Maintenance, Repairs and Components Russian airlines have taken orders for 62 aircraft from Airbus and Boeing, but will now stop supplying them. The companies will also stop repairing and supplying parts to the aircraft they currently have. Germany’s Lufthansa Technic says it has stopped serving Russian customers because it had contracts for hundreds of aircraft. Russia’s state news agency Tass reported that Russia’s transport ministry had drafted a bill to help airlines. Under this, maintenance work may be carried out by a third party until September 2022. Inspections of airlines will also be canceled. Aviation experts are concerned that due to restrictions, aircraft manufacturers will not share service bulletins as well as aircraft safety guidelines, which is very important from a safety standpoint. Rising oil prices and long-haul petroleum prices are at their highest levels since 2008.

Meanwhile, the United States has imposed sanctions on Russia’s oil imports. By raising fuel surcharges and fares, airlines are trying to ease some of the pressure, especially at a time when the number of passengers is already very low due to the epidemic. Due to Russian airspace restrictions, planes have to take longer routes, and in such a situation, the pain of high oil prices will be felt even more. For many flights, this has increased the flight time by 3.5 hours. The biggest impact has been on flights to North Asian countries, such as Europe and Japan, South Korea and China. Southeast Asia, Europe and India also have airspace restrictions. Longer flights mean not only oil, but also staff costs, lower luggage and higher maintenance costs, as well as increased airfare for hours of flight. NR / SM (Reuters).


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