(Bloomberg Businessweek) — For almost three long years, most global airlines were forced to strike large parts of Asia off their route maps because Covid-19 restrictions kept such markets as Japan, South Korea and Hong Kong virtually closed to tourists and business travel.
Now more countries and territories in the region are ending their pandemic-era travel curbs and quarantines—but few in the aviation world are rushing to add capacity to meet the expected upswing in traditionally lucrative long-haul travel. That’s because quarantines and lockdowns have since been replaced by another major obstacle: closed-off Russian airspace.
Stretching 5,600 miles, from the tip of Eastern Asia to the European rooftop in Finland, Russia is a crucial link that connects east and west and helps airlines cut travel times via polar routes. Since Russia invaded Ukraine in late February, Moscow has made that route off limits to airlines from the US, Canada, the UK and continental Europe.
That’s brought extensive detours for most airlines, adding hours to an already long journey and significantly increasing the cost of fuel, the industry’s single largest expense. Air France-KLM and other European carriers flying to Japan have had to skirt Russia via Kazakhstan and Mongolia, adding several hours to their flights, while Virgin Atlantic Airways Ltd. this month cited Russia airspace closures as a major reason for pulling out of Hong Kong for good. Finnair Oyj, which spent years creating a hub in Helsinki connecting northern Asia with Europe and the US, has seen its eastbound network decimated as a result of the Russian closure.
“European carriers fed their hubs not just in London, Paris and Frankfurt but also places like Zurich, Brussels and Vienna with connecting traffic from Asia,” says Mark Martin, founder of Dubai-based Martin Consulting LLC, which advises the aviation industry. “Most European carriers will be working out which routes are still profitable and whether they need to change frequencies, add stops or add another leg to flights to make the math work.”
Japan Airlines Co. flies to London from Tokyo via Alaska and Greenland and over the Atlantic to the British capital instead of Siberia, adding up to three hours of flight time each way.
But it’s not just the extra time and the fuel used in circumnavigating Russia that pose an issue. Because of the longer flight times, airlines will likely be forced to substitute aircraft, account for increased crew hours and possibly even block seats to allow their aircraft to fly longer with lighter loads, Martin says.Finland’s national carrier has been particularly hard hit, because flights through its Helsinki hub to destinations such as Hong Kong, Seoul and Shanghai have long relied on access to Siberian airspace. Finnair estimates that avoiding flight over Russia adds 15% to 40% to its Asian flight times. That, in turn, affects so-called aircraft rotation—the delicately synchronized task of bringing planes back to their bases to deploy them on other routes—as well as crew hours and fuel burn that together upend the economics of the flights. A Finnair flight to Tokyo from Helsinki now takes about 13 1/2 hours, instead of 9 1/2 hours, and the extra flying time requires an additional pilot.
At Air France, the Tokyo-Paris route has now become the carrier’s longest at more than 14 hours, a record previously held by its Paris to Santiago journey.
The pain isn’t evenly felt in the industry. Middle East carriers, whose state owners have refrained from sanctioning Russia over its invasion, continue to fly over or into the country. That gives Emirates Airline, Qatar Airways and Etihad Airways PJSC—the region’s three dominant players, which have built their business on global connections via their local hubs—a decisive advantage over their peers in Europe and the US.
Emirates, the world’s biggest long-haul airline, will pump more capacity into Japan by putting its Airbus A380 flagship on the Dubai-Tokyo Narita route beginning on Nov. 15. The carrier, which has a once-daily service from Dubai to Osaka on a Boeing 777-300ER, says it’s seen a surge in bookings since Japan’s government announced a loosening of travel curbs last month.
Then there’s freshly privatized Air India Ltd., now owned by India’s largest conglomerate, Tata Group. The carrier, which continues to operate flights through Russian airspace, stands to gain an unexpected advantage over its European and US rivals. In the past seven days, for example, Air India’s flight times to the US and Canada average about 1 1/2 hours less than those of competitors such as Air Canada and United Airlines, according to data from aviation consultant Cirium. On comparable routes, Air India is estimated to have used about 7.5 tons less fuel than rivals unable to traverse Russian airspace, according to Cirium. That translates into savings of about $8,500 for a single flight, based on International Air Transport Association (IATA) jet-fuel-pricing data.
Air India has also gained an upper hand by being able to continue operating lucrative nonstop flights between the US’s West Coast and India. Besides working to improve punctuality and in-flight services, new Chief Executive Officer Campbell Wilson is upgrading the fleet by overhauling existing aircraft and leasing five long-range variants of the Boeing 777 to scale up its US service with flights including from Mumbai and Bangalore to San Francisco.
Conversely, United Airlines Holdings Inc. has put on hold its long-touted San Francisco to Bangalore nonstop service—first announced in 2020—alongside its San Francisco-New Delhi and Newark-Mumbai routes, while American Airlines Group Inc. has indefinitely postponed the start of its Seattle to Bangalore flights.
Travel was a major industry for the Asia-Pacific region, with about 360 million international arrivals in 2019, according to a report from the Asian Development Bank. Rising incomes in the middle class drove a surge in demand for travel, the report said, with China, India, Japan and South Korea being the area’s key outbound markets.
While Asia’s aviation recovery has lagged the rest of the world because of strict travel restrictions, IATA expects passenger numbers to surge as rules ease. Still, IATA forecasts that international passenger traffic in the region won’t return to 2019 levels until 2025. As recently as August, it was only about 38% of 2019 levels.