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As Drama Brews, Russia Considers Banning European Carriers from Airspace

August 6, 2014 at 11:47 AM | by | Comments (0)

Meeting of the minds between Russia's Prime Minister Dmitry Medvedev (center), Transport Minister Maxim Sokolov (right), and Aeroflot's Deputy General Director Vadim Zingman (left).

Citing sources within the Russian government, a series of news articles ran yesterday reporting that Russia was considering banning all European air carriers from flying in its airspace.

In general, such a move would be in response to the growing tension between the European Union and Russia over the political issues surrounding Crimea. More specifically, Russia is upset that the EU canceled its leasing agreement with the low-cost carrier Dobrolet, a subsidiary of the country's national airline, Aeroflot. Originally, the EU cancelled the agreement because the airline flew to Crimea, and the sanctions against Russia were widened after MH17 was shot down a few weeks ago.

When the EU essentially banned Dobrolet from flying to its countries, Aeroflot's stock took a huge hit, and decided to ground Dobrolyot. As somewhat of a revenge tactic, Russia now wants to prevent any EU carrier from flying over its airspace.

The fallout would be huge. According to the Moscow Times, "a ban could cost carriers including Lufthansa, British Airways and Air France 1 billion euros ($1.3 billion) over three months. Restrictions would lead to longer flights, higher fuel use and other additional costs." Currently, many EU carriers fly over Siberia in route to Asia, each paying Russia a fee that adds up to about $300 million a year of extra income for Aeroflot.

Thinking logically, if Russia decides to pull the trigger on such a ban, flight times wouldn't be the only thing to increase for passengers traveling from Europe to Asia. Ticket prices would surely go up as well to compensate for the increased cost. We'll continue to keep an eye on this story as it develops. It seems the next decision is whether Russia feels strongly enough about its loss of Dobrolyot to forgo the $300 a year it pulls from collecting "fly-through" fees.

[Photo: Reuters]

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