US airlines would face massive financial losses if Russia increases tariffs for the use of its airspace in response to possible US sanctions targeting the country’s largest airline Aeroflot, an expert said.
On Thursday, Washington announced new sanctions against Moscow for allegedly poisoning double agent Sergei Skripal in the UK. Among the penalties reportedly being considered is a ban on Aeroflot flights to the US.
“If such measures are really needed, the Russian authorities could review the terms of transit use of the Russian airspace. Royalties for US airlines alone are not a panacea for sanctions against Russia, but from the point of view of moral satisfaction, it is possible to answer this way,” said Roman Blinov, head of the Analytical Department of the International Financial Center.
The analyst noted that it is hardly the most effective measure against US sanctions, but it is feasible, since American airlines would be forced to change the routes of their flights to Asia. “Taking into account the cost of fuel, which is quite expensive on the commodities market, the cost of aviation kerosene will really affect the profitability of flights of American airlines if they have to change their flight routes to Asia,” he added.
While US sanctions against Aeroflot could be imposed in three months, including a possible total flight ban to the US, officials in Washington have backtracked, saying sanctions against the airline will not be introduced for the moment.
Asked whether sanctions would apply directly to Aeroflot, a senior US State Department official said they would not, but could theoretically affect the company if it tried to import any of the goods covered by the sanctions.
Russian Airlines, commonly known as Aeroflot, is the flag carrier and largest airline of the Russian Federation. The carrier is an open joint stock company that operates domestic and international passenger and services, mainly from its hub at Sheremetyevo International Airport.
Aeroflot is one of the oldest airlines in the world, tracing its history back to 1923. During the Soviet era, Aeroflot was the Soviet national airline and the largest airline in the world. Following the dissolution of the USSR, the carrier has been transformed from a state-run enterprise into a semi-privatized company which ranked 19th most profitable airline in the world in 2007. Aeroflot is still considered the de facto national airline of Russia. It is 51%-owned by the Russian Government. As of September 2013, the Aeroflot Group had 30,328 employees.