The sky is closed: Ukraine-Russia "air wars"

Author : Andriy Korneyev

22:58, 1 October 2015

The sky is closed: Ukraine-Russia "air wars"

Author : Andriy Korneyev

Russia and Ukraine imposed mutual sanctions on airlines` services, both countries to suffer losses from such policy

22:58, 1 October 2015

air sanctions

War between Russia and Ukraine in the sky will reach its peak in late October. In fact, air traffic will be paralyzed. Ukraine imposed sanctions against Russian carriers for flights in Crimea, and Russia used similar reciprocal restrictions. As a result, Ukrainian airlines lost one of the highly sought destinations that had been bringing them no less than 10% of revenue. From such a situation airports in Minsk, Warsaw, Tallinn and Istanbul are to benefit, as well as the airline "UTair" - the only Russian carrier, which was not banned to fly to Kiev.

Ukrainian airlines received official notification from the Federal Air Transport Agency (Rosaviatsyia) on prohibition of flights to Russia from October 25 this year. All three carriers which fly to Russia were put under the restrictions: Ukraine International Airlines (UIA), "Dniproavia" and "Motor-Sich". Newbie - the company "Atlasjet-Ukraine" did not get a permission for flights to the country. Besides, Federal Air Transport Agency prohibited airlines to use its airspace. However, such restrictions are already in place as from summer 2014, therefore, this will not affect Ukrainian airlines.

UIA has stated that they intend to return money to all passengers who purchased tickets for flights to Russia after October 25. "Dniproavia" will submit inquiries regarding legality of such prohibitions to Russian authorities. Further actions of the carrier are dependent on the reply, but it can be assumed that the reply will be negative. Now the ball is ruled by politics, not economics.

Related: Ukrainian airlines are banned from flying to Russia since October 25

Political response

Such measure from Russia was a mirror-like response to a message of the State Aviation Administration of Ukraine, the official report of Ministry of Transport of Russian Federation states. "On September 28, State Aviation Administration of Ukraine unilaterally notified a number of Russian air carriers that from October 25, it prohibits performance of flights between Russia and Ukraine," reported the agency in its statement. Such decision by the Ukrainian government poses sanctions against major carriers for performing flights to Crimea. Sanctions affected “Aeroflot”, “Transaero” (purchased by “Aeroflot”), group S7 (flights are performed only by  airlines “Siberia”), and “Russia”. Another Russian airline, which flies to Ukraine — UTair did not fall under the sanctions. Chairman of the Russian airport "Vnukovo" Vitaliy Vantsev told the reporters that they will benefit from the sanctions imposed. "We are the only airport that will benefit from this.  UTair flies to Ukraine from us. It has two flights from Moscow to Kyiv per day," he happily said.

Quite possibly it is early to celebrate, as work of mentioned carrier will also be limited. For example, during a meeting of Cabinet of Ministers of Ukraine, Interior Minister Arsen Avakov offered to ban the airline’s flights. " Not to happen that “UTair”, purely Russian company ... was left, and all the rest were kicked out”, he said.

Related: Ukraine announced sanctions against Russian airlines

Mutual losses

Russian direction, which, as estimated by the air expert Sergei Khizhnyak, brought at least 10% of income, was considered one of the most profitable for carriers. In the opinion of representatives of the Ukrainian airlines, from 10 to 11 thousand passengers per month were services on flights between the countries. "Absence of direct flights - is a big loss," - director of consulting company Friendly Avia Support Alexander Lanetsky says. According to his estimates, the entire flow was divided as follows: 20% of passengers were carried by UIA, 50% - by "Aeroflot" and "Russia", 27% - by "Transaero", "Siberia" and "UTair", and the remaining 3% - by "Dniproavia". As reported by the Russian carriers, about 30% - is transit through Moscow in the Americas and Asia, which now can be forgotten.

As estimated by two analysts of aviation market, losses of Russian carriers may amount up to USD 70-80 million per year, which would pose no good effect on their financial position. For example, "Transaero" aircraft have been refused to refuel tonight because of debts. Only after a call from the Russian Government, the agreement was reached that fuel will be provided before October 2. Prime Minister Dmitry Medvedev himself is committed to interpose in the situation.

Ukrainian carriers will suffer losses too. For example, as informed by UIA’s press service, losses of the carrier will amount to USD 35 million per year, including USD 19.6 million per year of flight operations, USD 5.8 million per year of income from UIA’s route network flights and USD 850,000 per month – downtime of three aircraft which are engaged in carrying out flights. In addition, losses from the ban UIA’s aircraft to use Russian airspace for transit when carrying out the flights to Kazakhstan, Uzbekistan, China and Thailand will amount up to USD 6.4 million per year.

Related: Russian airlines are banned from flying to Ukraine

How one would get to Russian Federation

Yet, the passenger flow between Ukraine and Russia will not go away, therefore the situation at hand will favor first of all to airports in Minsk, Riga, Warsaw, Tallinn and Istanbul. "The passengers will fly to Moscow and St. Petersburg through them," - Alexander Lanetsky says. In his opinion, transit passengers are likely to choose a new transfer hub - Istanbul.

At the moment, one can buy a ticket from Kiev to Moscow for October 23 with return the next day at UIA UAH 4,9 thousand. The flight takes about one and a half hours. For the same price one can fly from Kiev to St. Petersburg within about two hours with "Aeroflot".

Flights after October 25 will not be as comfortable. For example, according to the reservation system "Pilot", it will take 5 hours to get from Kiev to Moscow on November 3, and 6 hours – to return on November 6. Mentioned service is offered by "Belavia" with a transfer in Minsk. The cost of roundtrip tickets is UAH 4.8 thousand. Alternately, railway service may be used: one-way ticket will cost UAH 2.1 thousand.

According to the system "Pilot", on November 18 it will take 4 hours to get to St. Petersburg, and 10 minutes less – to return back on November 21. Mentioned service is offered by AirBaltic. The transfer will be made in Riga. Tickets price is UAH 4.8 thousand. It will take more than 22 hours to get to St. Petersburg by train, and the on-way ticket price will amount to UAH 2.8 thousand.

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