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  1. Analysis
8 March, 2022

Weekly data: Inflation hits Russia’s aviation sector

A combination of Western sanctions, inflation and airspace closures have caused prices in Russia's aviation sector to skyrocket.

By Ben van der Merwe

The cost of flights out of Russia has soared in the past week as Western sanctions take effect. In response to Russia’s invasion of Ukraine, the EU, the US, the UK and Norway have closed their airspace to Russian aircraft. Russia has since banned those countries’ airlines in retaliation.

That has led to an extraordinary increase in prices for Russians looking to travel to Europe. For instance, the cost of a flight from St Petersburg to Vilnius, the capital of Lithuania, has risen from just £55 at the beginning of March to £1,457, according to data from Google Flights.

Many previously direct flights are now being routed through Istanbul, Dubai or Belgrade, to the benefit of Turkish Airlines , Emirates and Air Serbia.

Flights to neighbouring Estonia now require a detour to Istanbul, raising the flight time from one to 11 hours and the price from just £95 to £1,456. Flights to Milan, meanwhile, are being routed through Dubai, raising the cost from £65 to £740 and adding 12 hours to the flight time.

The sanctions and counter-sanctions threaten to derail the recovery of an industry still suffering from the Covid-19 pandemic. European airlines made a net loss of €18.5bn in 2021, according to Eurocontrol. Daily average flights for several leading carriers remained less than half of their pre-pandemic level, with budget airline easyJet down by 64% compared with 2019.

More coverage of the Ukraine invasion from Investment Monitor:

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