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Mar 07,2022

Many countries and Russia "no-fly" each other, and air freight costs have risen

The development of the Russia-Ukraine conflict is having a clear impact on the already fragile global supply chain. The United States has officially announced the closure of its airspace to Russian aircraft. Prior to this, the European Union and Canada have also taken similar measures. In response, Russia announced the closure of its airspace to aircraft from 36 countries, including all 27 EU member states. According to industry analysts, the mutual closure of airspace by many countries and Russia will further affect the global supply chain and push up the cost of air transportation.

 

Many countries and Russia "no-fly" each other, and air freight costs have risen

 

The U.S. Department of Transportation and the Federal Aviation Administration said on March 1 that the ban on Russian aircraft will take full effect on the evening of March 2, and all passenger and cargo aircraft belonging to Russia, registered in Russia, and controlled by Russia, including charter, leased and Private jets are not allowed to enter or use U.S. airspace. Prior to this, the European Union and Canada announced on February 27 that they would close their airspace to Russian aircraft; the Russian government announced the next day to take countermeasures to close their airspace to aircraft from 36 countries, including all 27 EU member states. American Airlines, Delta Air Lines, and United Parcel Service confirmed this week that they have suspended flights through Russian airspace; United Airlines said on March 1 that it has suspended flights over Russian airspace and is evaluating how to bypass Russia. to India and other places. Boeing announced on March 1 that it would suspend the provision of aircraft parts, aircraft maintenance, and technical support to Russian airline operators.

 

Airfreight costs are rising, and industry analysts believe that the closure of airspace by many countries may further disrupt the global supply chain, putting further pressure on the air transport industry, which has already been affected by the new crown pneumonia epidemic and rising oil prices. Russian air operators will be severely hit because about 70% of flights between Russia and the European Union are operated by Russia. In addition, the ban also seriously affects air transportation between Europe and Japan, South Korea, etc. According to estimates by Frederick Horst, general manager of Cargo Live Consulting, the capacity of the affected flights accounts for about one-fifth of global air cargo traffic, and air cargo between Europe and Asia "may need to find alternative transportation for a quarter. way”, such as detours to the Middle East, Southeast Asia or South Asia. According to data from the International Air Transport Association, the shortage of shipping containers and port congestion have pushed up air transportation demand. Airfreight demand in 2021 will increase by 6.9% compared with 2019; air freight prices in December 2021 will increase by 150% compared with the same period in 2019. "Air freight has become more expensive due to longer routes," said Stefan Mihir, an analyst at Germany's Baden-Württemberg state bank.

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