The ban on flying over Russian airspace as a result of Moscow's military offensive in Ukraine will hit routes from Europe to Asia the hardest, disrupting air cargo and stifling supply chains, Moody's Investors Service said.
Finnair in Helsinki is the European airline most affected by the airspace ban, flying around 40 per cent of capacity to the Asia-Pacific region, while the exposure for other long-haul airlines is about 10 per cent to 20 per cent, the credit rating agency said in a report.
For airports, exposure to Asia-Pacific routes varies with London Heathrow having the biggest exposure to the Asian market, which is expected to be affected by the closure of airspace, although current passenger volumes remain low, Moody's said.
"Logistical challenges in rerouting will add costs, causing temporary cancellations and ongoing disruption," it said. "Air cargo, which is a small component of traffic for most rated European airlines and airports, will also be disrupted, affecting supply chains for products including medical equipment, consumer electrical goods and textiles."
The global aviation industry is exposed to the conflict-related sanctions on Russia given the size and integration of the country into the sector. Plane manufacturers, lessors, aircraft maintenance companies and insurers serving Russian airlines such as Aeroflot are among those directly hit by the sanctions.
International airlines, meanwhile, are suffering from sharply rising oil prices and the additional cost of rerouting flights to avoid Russian airspace, which is expected to drive up ticket prices and air cargo rates.
"Ripple effect from the Russia-Ukraine war may trim air travel demand and pressure fare," George Ferguson, senior aerospace analyst at Bloomberg Intelligence, said of intra-Europe travel in the second quarter of 2022.
The conflict has resulted in a steep increase in crude oil prices, so airlines' fuel costs will increase although most European carriers are about 50 per cent hedged for 2022, Moody's said. Hedged airlines could typically see a 20 per cent to 25 per cent increase in fuel costs compared to expectations at the start of 2022, if current jet fuel prices are sustained.
Pressures will rise if jet fuel prices remain high through the rest of the year and into 2023, when the fuel hedging cover reduces.
Hungary-based Wizz Air has more limited hedging and is more immediately exposed, while Ryanair is the most hedged and at a competitive advantage, the report said.
"With fuel costs representing around 22 per cent of revenue for the industry globally in 2019, the increased costs would need to be passed through to ticket prices to preserve profitability," Moody's said.
"This would imply ticket price increases for hedged airlines of around 5 per cent to maintain margins, although the effect will vary significantly depending on the effective fuel costs incurred by each airline and demand elasticity for different routes."
However, European airlines in general have "very low exposures" to routes between Europe and Russia or Ukraine as a proportion of their total traffic, the report said.
Wizz Air is the most affected, with these routes representing about 9 per cent of summer 2022 schedules by available seat capacity. Turkish Airlines flies about 2.5 per cent of its capacity to Russia, while for the larger airlines exposure is less than 2 per cent, Moody's said.
The exposure of the Moody's-rated European airports to routes into Russia and Ukraine is also limited, mostly at less than 1 per cent of total annual passenger traffic. Prague airport has the biggest exposure at more than 5 per cent. Moscow Domodedovo is the only Moody's-rated Russian airport and is by far the most exposed, the agency said.
Looking ahead, demand for popular leisure routes in the summer could remain robust but is uncertain amid risks of military conflict escalation, Moody's said.
"Airlines are still recovering from the pandemic and from a low base at the start of 2021, and benefiting from loosening travel restrictions across Europe and transatlantic routes. Their high growth forecasts for summer 2022 may now need to be tempered," the report said.
Pent-up demand still has the potential to drive a continued recovery in passenger volumes in summer, especially for traditional leisure destinations in southern Europe, as well as routes west towards central and North America and the Caribbean, it said.
Inbound tourist travel into Europe is more likely to suffer, as well as routes into Eastern Europe.
"An escalation of the military conflict may dampen demand, with a potential knock-on effect on the ability of airlines to pass through higher fuel prices," Moody's said.
"The challenges airlines face in recovering pre-pandemic volumes and profitability through to 2023 have increased, with risks of higher fuel costs, higher inflation and lower disposable incomes dampening consumer demand."
Women’s World T20, Asia Qualifier, in Bangkok
UAE fixtures Mon Nov 20, v China; Tue Nov 21, v Thailand; Thu Nov 23, v Nepal; Fri Nov 24, v Hong Kong; Sun Nov 26, v Malaysia; Mon Nov 27, Final
(The winners will progress to the Global Qualifier)
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Joker: Folie a Deux
Starring: Joaquin Phoenix, Lady Gaga, Brendan Gleeson
Director: Todd Phillips
Rating: 2/5
POWERWASH%20SIMULATOR
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Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
MATCH INFO
Manchester United 1 (Greenwood 77')
Everton 1 (Lindelof 36' og)
RESULTS
Cagliari 5-2 Fiorentina
Udinese 0-0 SPAL
Sampdoria 0-0 Atalanta
Lazio 4-2 Lecce
Parma 2-0 Roma
Juventus 1-0 AC Milan
Match info
Uefa Champions League Group C
Liverpool v Napoli, midnight
More on animal trafficking
About Karol Nawrocki
• Supports military aid for Ukraine, unlike other eurosceptic leaders, but he will oppose its membership in western alliances.
• A nationalist, his campaign slogan was Poland First. "Let's help others, but let's take care of our own citizens first," he said on social media in April.
• Cultivates tough-guy image, posting videos of himself at shooting ranges and in boxing rings.
• Met Donald Trump at the White House and received his backing.
Going grey? A stylist's advice
If you’re going to go grey, a great style, well-cared for hair (in a sleek, classy style, like a bob), and a young spirit and attitude go a long way, says Maria Dowling, founder of the Maria Dowling Salon in Dubai.
It’s easier to go grey from a lighter colour, so you may want to do that first. And this is the time to try a shorter style, she advises. Then a stylist can introduce highlights, start lightening up the roots, and let it fade out. Once it’s entirely grey, a purple shampoo will prevent yellowing.
“Get professional help – there’s no other way to go around it,” she says. “And don’t just let it grow out because that looks really bad. Put effort into it: properly condition, straighten, get regular trims, make sure it’s glossy.”
Company%20Profile
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The biog
Name: Marie Byrne
Nationality: Irish
Favourite film: The Shawshank Redemption
Book: Seagull by Jonathan Livingston
Life lesson: A person is not old until regret takes the place of their dreams
Lewis Hamilton in 2018
Australia 2nd; Bahrain 3rd; China 4th; Azerbaijan 1st; Spain 1st; Monaco 3rd; Canada 5th; France 1st; Austria DNF; Britain 2nd; Germany 1st; Hungary 1st; Belgium 2nd; Italy 1st; Singapore 1st; Russia 1st; Japan 1st; United States 3rd; Mexico 4th
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
UAE squad
Men's draw: Victor Scvortov and Khalifa Al Hosani, (both 73 kilograms), Sergiu Toma and Mihail Marchitan (90kg), Ivan Remarenco (100kg), Ahmed Al Naqbi (60kg), Musabah Al Shamsi and Ahmed Al Hosani (66kg)
Women’s draw: Maitha Al Neyadi (57kg)
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Where to Find Me by Alba Arikha
Alma Books
AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
SCORES
Yorkshire Vikings 144-1 in 12.5 overs
(Tom Kohler 72 not out, Harry Broook 42 not out)
bt Hobart Hurricanes 140-7 in 20 overs
(Caleb Jewell 38, Sean Willis 35, Karl Carver 2-29, Josh Shaw 2-39)
The Africa Institute 101
Housed on the same site as the original Africa Hall, which first hosted an Arab-African Symposium in 1976, the newly renovated building will be home to a think tank and postgraduate studies hub (it will offer master’s and PhD programmes). The centre will focus on both the historical and contemporary links between Africa and the Gulf, and will serve as a meeting place for conferences, symposia, lectures, film screenings, plays, musical performances and more. In fact, today it is hosting a symposium – 5-plus-1: Rethinking Abstraction that will look at the six decades of Frank Bowling’s career, as well as those of his contemporaries that invested social, cultural and personal meaning into abstraction.
The biog
Favourite food: Fish and seafood
Favourite hobby: Socialising with friends
Favourite quote: You only get out what you put in!
Favourite country to visit: Italy
Favourite film: Lock Stock and Two Smoking Barrels.
Family: We all have one!
Asia Cup 2018 final
Who: India v Bangladesh
When: Friday, 3.30pm, Dubai International Stadium
Watch: Live on OSN Cricket HD
