Maria Kiselyova and Gleb Stolyarov: “Russia may restrict trans-Siberian flights for EU airlines” – Reuters

Posted on :Aug 05, 2014

By: Maria Kiselyova and Gleb Stolyarov

Reuters

August 5, 2014

(Reuters) – Russia may restrict or ban European airlines from flying over Siberia on busy Asian routes, a newspaper reported on Tuesday, following Western sanctions which have grounded one Russian carrier and a billionaire’s private jet.

The Russian business daily Vedomosti quoted unnamed sources as saying the foreign and transport ministries were discussing possible action which might force EU airlines into long and costly detours and put them at a disadvantage to Asian rivals.

Shares in Russian carrier Aeroflot – which, according to Vedomosti, gets around $300 million a year in fees paid by foreign airlines flying over Siberia – tumbled after the report.

The Transport Ministry and the civil aviation authority declined to comment on the possibility of responding to the European Union sanctions imposed due to the Ukraine crisis, which were tightened last week.

At the height of the Cold War, most Western airlines were barred from flying through Russian airspace to Asian cities, and instead had to operate via the Gulf or the U.S. airport of Anchorage, Alaska on the polar route.

However, European carriers now fly over Siberia on their rapidly growing routes to countries such as China, Japan and South Korea, paying the fees which have been subject to a long dispute between Brussels and Moscow.

The daily quoted one source as saying 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.

However, state-controlled Aeroflot would also be hurt if it lost the fees. Aeroflot was the worst performing stock in Moscow on Tuesday, down 5.9 pct at 1030 GMT compared with a one percent drop on the broad index.

Lufthansa said it operates about 180 flights a week through Siberian airspace but declined further comment, as did British Airways.

The EU widened its sanctions, imposed originally over Russia’s annexation of Crimea in March, after last month’s downing of a Malaysian airliner over territory in eastern Ukraine controlled by pro-Moscow rebels.

Russian low-cost airline Dobrolyot, run by Aeroflot, suspended all flights last week after its plane lease agreement was cancelled because the EU extended sanctions on the carrier for flying to Crimea.

Sanctions imposed by the United States have also targeted people close to Russian President Vladimir Putin.

Billionaire Gennady Timchenko said U.S. company Gulfstream had stopped servicing his private plane. “Gulfstream has ceased to fulfil its contractual obligations, grounding my jet which had been purchased from it for a lot of money,” he told ITAR-TASS news agency in an interview.

Gulfstream had been banned from any contact with Timchenko, he said, and could no longer supply spare parts. Pilots had also been banned from using the jet’s navigation system.

However, Timchenko said Russia’s business elite would not put pressure on Putin to change tack on Ukraine due to the sanctions which would only strengthen support for his policies.

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