Russia’s invasion of Ukraine raise concerns over a fifth of air freight

AirBridgeCargo Airlines Boeing 747-8F freighter

Global supply chains, already hit hard by the pandemic, face new disruption and cost pressure as airspace bans following Russia’s invasion of Ukraine raise concerns over a fifth of air freight.

Transport between Europe and north Asian destinations like Japan, South Korea and China is in the front line of disruption after reciprocal bans barred European carriers from flying over Siberia and prevented Russian airlines from flying to Europe.

Airlines responsible for moving around 20% of the world’s air cargo are affected by those bans, Frederic Horst, managing director of Cargo Facts Consulting, told Reuters on Tuesday.

Germany’s Lufthansa, Air France KLM, Finnair and Virgin Atlantic have already cancelled north Asian cargo flights over closed access to airspace.

Major Asian carriers like Korean Air Lines and Japan’s ANA Holdings are still using Russian airspace, however, as are Middle Eastern airlines.

Shares in German logistics firm Deutsche Post fell almost 3% on Tuesday Mar. 1. Major airline shares fell around 1%.
Pure cargo carriers like Russia’s AirBridgeCargo Airlines and Luxembourg’s Cargolux are subject to the bans in a move that could send air freight rates – already elevated due to a lack of passenger capacity during the pandemic – soaring further.

“The flights become more expensive due to the longer routes” said Stefan Maichl, analyst at Germany’s Landesbank Baden-Wuerttemberg. Reuters.com