How are sanctions against Russia affecting the aviation industry?

With the ongoing tensions between Russia and Ukraine, there have been many restrictions, sanctions, and rules put in place in response to the events that have taken place. Long time supplier relationships have been cut off, the majority of flights are no longer allowed to fly over Ukraine, and countries are less willing to work with Russia.

That begs the question: just how much are the sanctions against Russia affecting the entire aviation industry as a whole?

First things first, all of the suppliers, manufacturers, insurers, etc. that work with Russian-based aviation companies are hit directly by all of the sanctions and restrictions. With the aviation industry trying to make a rebound, this is detrimental to all Russian-based operators who were likely looking to make a 180 after the COVID pandemic. They are not longer able to receive parts, maintenance, or any related services from these companies.

Because of the higher oil prices and longer routes that are needed to fly over Ukraine and Russia, airline companies are required to pay more in expenses which affects their gross profit. As a result, ticket prices are expected to increase along with air freight rates.

In addition, big suppliers such as Boeing, Bombardier, and Airbus have cut off their relations with Russia which means that they too, will be affected. With less of a supply, there will be less output and a potential price hike.

On top of this, Russian airlines have been banned from the Insurance markets in the European Union, which is another big blow to the country as well. So, if planes are potentially lost from the ongoing tensions, they may not be replaced or insured at all which means that they are responsible themselves for all of the losses.

All in all, even though there is a major blow to Russia, the companies that are forgoing their relationship are also affected as well since there is lost business involved on both sides. Additionally, expenses primarily in oil prices, staffing, less cargo ability, and elevated air freight fares, are going to remain this way for the industry until further notice.

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