European aviation assesses losses affected by sanctions

Created on 01.04.2022 14:52

EU sanctions imposed on Russia are also having an impact on the European aviation sector, affecting the financial soundness of airlines and air navigation service providers. The  full range of implications is difficult to analyze, but they are already quite significant. The air carriers in the eastern part of the EU have begun voicing the need for another anti-crisis measures.

The impossibility of overflying Russian territory forces many market participants to reconsider their strategies. Thus, the Finnair that has traditionally used the Trans-Siberian routes to Asia, is already suffering significant losses and is forced to cut staff. The hardest-hit affected the LOT Polish Airlines, whereby flights are now operated via the North Pole to Asia and take 4.5-5 hours longer than before.

Moreover, the tariffs for carbon dioxide emissions have been increased under the European Emissions Trading Scheme (ETS). Meanwhile, the European Commission Transport Director Henrik Hololei noted that commercial aviation in Europe is actively recovering from the pandemic. The passenger traffic has reached 70% of the pre-crisis level within Europe, and recovery is occurring most rapidly on transatlantic routes.

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