Aviation counts the cost of Ukraine conflict

The conflict in Ukraine has sent European airlines scrapping their optimistic projections of a post-pandemic recovery in 2022. The impact on aviation is two-fold. In the immediate term, airlines have had to cancel services to Russia and Ukraine, and re-route flights to avoid the two countries’ airspace. Longer-term there are worries about how rising fuel costs and wider economic fall-out will damage balance sheets and consumer demand ahead of the busy summer season.

Moscow’s invasion came just as airlines were looking forward to normality returning to the market, with Covid-19 protocols easing rapidly throughout the continent and beyond. The relaxing of border closures by Australia, Singapore and other Asia-Pacific countries provided hope that even the elusive widebody sector could start to revive, as a result of pent-up demand by business and leisure travelers and those desperate to visit families again.

Two of the European airlines most affected by the crisis – Ryanair and Wizz Air, who both serve a number of cities in the affected region – said this week that the impact to traffic from the crisis could be offset by rising ticket sales elsewhere in the months ahead, so long as the conflict did not spread beyond the borders of Ukraine. However, the inevitable rise in the global oil price will put pressure on all carriers’ finances, fragile after two years of on-off travel restrictions.

Finnair is one of the worst-hit operators. Its business model is largely based on the appeal of its Helsinki hub being closer to key Asian destinations. However, those lucrative long-haul services depend on it overflying the vast territory of its next-door neighbour, Russia. The flag-carrier has been talking about bringing back furloughs – the tool widely used to keep flightcrew and other employees on the books during the long groundings of 2020 – for up to 90 days.

However, if the situation is tough for Western European carriers, for Russia’s airlines things are as bad as they were during the height of the pandemic, and could get worse. Not only are they banned from much of the world’s airspace, most of the foreign manufacturers that they buy or lease their aircraft and parts from are refusing to do business. Brazil’s Embraer this week became the latest to cut all ties, following the example of Airbus and Boeing.

If sanctions – from private companies as well as governments – continue for weeks, months or even years, it is difficult to see how Russian airlines can stay solvent without vast support from a government short of hard currency. Additionally, lack of support from aircraft and parts suppliers will make it difficult for them to operate safely. Russia has always had a domestic aerospace sector, but its airlines have become increasingly reliant on Western manufacturers in recent decades.

The conflict has also led to the destruction of the only example of one of the world’s most iconic aircraft. The six-engine Antonov An-225, built in the Soviet era to transport a space shuttle and transformed into an outsize freighter, has been confirmed to have suffered irreparable damage during a Russian assault on Gostomel airfield, outside Kiev.

Its fate had been unclear for several days, but footage now shows the giant airlifter – developed from the four-engine An-124 – crushed beneath a ruined hangar. First operated in the late 1980s, the An-225’s modified tail with twin vertical fins provided the stability for ‘piggy-back’ operations such as the Soviet Union’s Buran space shuttle. Under its operator Antonov Airlines, it had recently been used to carry medical supplies into Ukraine during the pandemic.