Support The Moscow Times!

Aeroflot Shares Tumble as Russia Threatens Airspace Closure

Aeroflot's shares plummeted on Tuesday on fears that Russia's response to Western Sanctions would cost it hundreds of millions of dollars. Maxim Stulov / Vedomosti

Shares in Aeroflot tumbled Tuesday on reports that Russia would retaliate against Western sanctions by banning European airlines from flying over Siberia on Asian routes, potentially costing Russia's flagship airline the $300 million it earns in fees from the airlines each year.

At 5 p.m. in Moscow, Aeroflot's shares were down nearly 6 percent, having recouped slightly from a fall of 8 percent earlier in the day. The Russian stock market as a whole was down 1.5 percent.

Daily newspaper Vedomosti reported Tuesday that the Russian government was discussing a ban on EU flights over Siberia, which would force affected airlines to skirt Russian airspace, increasing their flight times and fuel costs and handing an advantage to Asian airlines.

Foreign airlines have been paying a fee to fly over Siberia since the 1970s. Aeroflot, then the Soviet Union's flagship, collected the fees, a right that it inherited after the collapse of communism in 1991.

One source told Vedomosti that the airspace restrictions would cost major European carriers 1 billion euros ($1.3 billion) over three months.

Aeroflot has already born the brunt of EU sanctions. On Sunday, its newly launched budget airline Dobrolyot was grounded after its plane lease and service agreements were cancelled by European suppliers.

Dobrolyot was blacklisted by the EU in late July for flying to Crimea, the Ukrainian territory whose annexation by Russia in March sparked a 5-month confrontation between Russia and the West that shows no signs of cooling.

See Also:

Russia May Ban EU Airlines' Routes Over Siberia in Response to Sanctions

Sign up for our free weekly newsletter

Our weekly newsletter contains a hand-picked selection of news, features, analysis and more from The Moscow Times. You will receive it in your mailbox every Friday. Never miss the latest news from Russia. Preview
Subscribers agree to the Privacy Policy

A Message from The Moscow Times:

Dear readers,

We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."

These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.

We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.

By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more