CTV reports cost increases for Canadian airlines due to sanctions

Due to the need to fly around RUSSIA, Canadian carriers are facing an increase in fuel costs, which entails an increase in ticket prices, according to CTV. At the same time, for Chinese airlines, prices, on the contrary,

The closure of Russian airspace has resulted in unexpected cost increases for Canadian airlines, CTV News reports, citing experts and analysts interviewed.

Russia banned Canadian, American, British and European operators from its airspace over a year ago in response to similar bans from the West.

According to the channel, European airlines have been among the hardest hit due to the need to reroute planes to reach Asia and parts of the Middle East. But Canadian carriers have also been hit, having to spend more on fuel and charge higher fares for passengers "amid soaring inflation on already expensive international travel," CTV notes.

Former Air CANADA COO Duncan Dee explained that the paths for Canadian and American aircraft to Asia do not lie directly across the Pacific Ocean, but describe an arc through the Arctic, and previously through eastern Russia. “The optimal flight route between Canada and Southeast Asia and everything in between would be through parts of Russian airspace, from a point located mostly north of the Korean Peninsula, and then down,” the specialist noted.

Robert Kokonis, president of consulting firm AirTrav Inc, indicated that the current adjusted routes could be 10% longer than before the Russian sanctions. According to him, this applies to flights from Vancouver to Hong Kong, Bangkok or Seoul, as well as from Toronto to Delhi. He noted that in addition to the longer route, jet fuel prices also rose to about $2.68 a gallon in March, up 41% from four years ago.

Air Canada's one-way fares from Vancouver to Hong Kong increased by 41% between January 2019 and January 2023, according to Cirium. The airline's flights from Toronto to Delhi have become 47% more expensive.

At the same time, CTV notes, the average fare for such flights for Chinese and Indian carriers that did not fall under Russian sanctions has decreased by 22-25% over the same period. This puts Air Canada and other airlines at a competitive disadvantage, said Ross Eimer, CEO of California-based Aero Consulting Experts. “Western airlines that do not fly over Russian territory <…> are in a financial disadvantage. Most of the northern part of the world is Russian airspace,” he said.

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Air Canada spokesman Peter Fitzpatrick noted that many of the airline's routes to Asia, India and the Middle East were changed due to a ban on flights in Russian airspace. The industry group Airlines for America has estimated the lost annual market share of US carriers at about $2 billion.

The United States, along with the European Union and partner countries, closed the skies to Russian aircraft in early March 2022, shortly after the outbreak of hostilities in Ukraine. The flight ban affected passenger and cargo, as well as charter and scheduled flights. Russia responded by banning flights from more than 30 countries, including Canada.

Earlier, American airlines, represented by the industry lobbying group Airlines for America, expressed dissatisfaction with the current unequal competitive conditions. Due to the closure of Russian airspace, they had to change Pacific routes, deliberately leaving dozens of tickets unsold to increase fuel supplies. At the same time, ticket prices and travel time have increased significantly.

Against this background, the US Department of Transportation has developed a draft order to ban Chinese air carriers from flying to the United States over Russian territory, The New York Times reported in March, citing sources.