The Russian government has prepared a draft decree that could allow Russian airlines to pay for leased aircraft in roubles throughout 2022. 

However, if a foreign lessor decides to terminate a leasing contract and requests that the aircraft be returned earlier than specified in a leasing agreement, the airline will have a right to continue flying the plane, according to Interfax.ru.  

Under a new law drafted by the Ministry of Transport of the Russian Federation on March 10, 2022, the decision to terminate lease agreements and return aircraft to foreign lessors will be overseen by a special government commission, headed by Deputy Prime Minister Yury Borisov. Without the commission’s decision, Russian carriers will be allowed to continue operating the leased aircraft and the leased planes. 

Russia’s Ministry of Transport also proposed that aircraft are expected to be insured and reinsured by Russian insurance organizations under the same conditions specified in the contract. 

The draft decree will apply to all aircraft lease agreements concluded before February 24, 2022. 

Western sanctions imposed on Russia following its invasion of Ukraine require foreign lessors to terminate lease contracts in Russia by March 28, 2022. However, foreign leasing companies are unlikely to be able to reclaim aircraft from Russia while the conflict in Ukraine continues. 

On March 7, 2022, the Russian Federal Air Transport Agency (Rosaviatsiya) issued a host of recommendations for airlines in an attempt to negate Western sanctions.  

Russian authorities have recommended airlines avoid operating to foreign destinations with leased aircraft in order to mitigate the likelihood of planes being seized while on the ground outside of Russia. The authorities have also discussed re-registering aircraft owned by foreign lessors, effectively nationalizing the aircraft, and have urged operators to keep all technical documents to hand. 

Source: Aerotime Hub

The latest data from ForwardKeys reveals that the Russian invasion of Ukraine has caused an immediate stall in flight bookings to Europe and within Russia domestically.

In its second public analysis since the outbreak of war, ForwardKeys compared flight bookings in the week following the invasion, February 24th-March 2nd, to the previous seven days.

Excluding Ukraine and Moldova, which closed their air space, and Russia and Belarus, which were subjected to flight bans and safety warnings, the destinations worst affected were generally those closest to the conflict.

Bulgaria, Croatia, Estonia, Georgia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia all saw a 30-50 per cent collapse in bookings.

All the other European countries, except for Belgium, Iceland, and Serbia, which saw single digit drops, experienced a decline in bookings between ten and 30 per cent.

Domestic flight bookings in Russia fell 49 per cent.

Analysis by source market shows that intra-European air traffic was worse affected than transatlantic travel.

Flight bookings within Europe fell 23 per cent, whereas they fell 13 per cent from the USA.

The only European air corridor left open to Russia is via Serbia, which is now acting as a gateway.

This is most clearly demonstrated by an immediate uplift in seat capacity between Russia and Serbia in March and by the profile of bookings.

Seat capacity scheduled in the first week of March shows around 50 per cent increase in available seats for flights from Russia to Serbia, compared to February 21st (before full scale military operations began).

Some 60 per cent more flight tickets were issued for travel from Russia to another destination via Serbia in the week immediately after the invasion, than there were in the whole of January.

Also, in January, 85 per cent of transfers from Russia via Serbia were to Montenegro; in the week after the invasion, the figure was 40 per cent, as Serbia became a hub for onward travel to Cyprus, France, Switzerland, Italy and elsewhere.

Olivier Ponti, vice president, insights, ForwardKeys, said: “Russia’s invasion of Ukraine has made an immediate impact, stalling what had been a strong recovery in travel since early January.

“What I find surprising is that transatlantic travel and western European destinations have been less badly affected than I feared – North Americans can tell the difference between war in Ukraine and war in Europe, and so far, it seems that travellers regard the rest of Europe as relatively safe.

“There is also a strong pent-up demand.

“What’s most notable is the speed with which Serbia has become the gateway for travel between Russia and Europe.

“However, these are early days in a global political and economic crisis; so, what happens to travel will certainly be affected by the progress of the war and the impact of sanctions.

“Over the coming weeks, I expect we will see inflation and possible fuel supply issues pulling back what would otherwise be a strong post-pandemic recovery, as Covid-19 travel restrictions are progressively lifted.”

Source: Breaking Travel News

An increasingly competitive landscape and high airfreight costs have put pressure on air cargo in some landlocked parts of Africa.

Most African shipments are perishables, but for mining economies such as Zambia, which is landlocked in southern Africa, mining-related materials, as a percentage of total imports, have declined in recent years.

Generally, there has been a steady decline of imports and exports since 2018 in the country. Imports to year-end 2021 were down 25%, and exports down 15% over the same period, according to data from NAC2000 Corporation, the only ISAGO registered and certified airport ground services provider in Zambia.

“We observed that due to absence of capacity and prohibitive airfreight cost we have seen mining equipment being progressively sourced and stored via sea and road through depots in South Africa, and trucked within the region, with most non-urgent mining cargo sent by sea and road, much less by airfreight,” said Jonathan Lewis, managing director at NAC2000.

Additional data shows that imports are reducing from a ratio of 80% imports and 20% exports in 2018 to 70:30% respectively in 2021, due mainly to an increase in export volumes primarily in fruit, vegetables and flowers, mainly to the UK and EU, and to a lesser extent regional shipments of live chicks and hatching eggs. Imports were mainly bolstered by an influx of pharmaceuticals and PPE due to the pandemic, but Covid vaccines remain of negligible volumes and have no meaningful impact on import figures.

With GDP across Africa expected to double in 20 years, air travel will inevitably lead to increased trade, and consequently air cargo will benefit – but trade barriers between African countries have historically hindered progress. But now with agreements such as the African Continental Free Trade Area (AfCFTA) there is hope for more intra-African trade.

Increased continental trade could foster a more competitive manufacturing sector to create opportunities for industries, including air freight and associated handling.

“My concern is the pace at which this will happen for airfreight regionally,” said Mr Lewis. “I believe that there is potential to leap forward the pace of this trade and development through airfreight, especially for perishable and urgent cargo.”

Mr Lewis reckoned AfCFTA will have less impact for air freight without deliberate implementation of the Yamoussoukro Decision (YD) and developing more point-to-point routes within the region and continent. “It would be advantageous for Africa’s air transport industry stakeholders to get in on this forecasted movement of cargo with competitive rates, capacity and routes.”

Zambia, Zimbabwe and South Africa were the most affected in terms of capacity due to the flight restrictions that were imposed on the region at the outset of the Covid Omicron variant. Most cargo from Zambia typically moves on passenger services with regular scheduled services operated by Ethiopian, Kenya Airways, Emirates, Qatar Airways and SAA.

Typically, in the Zambian context, monthly passenger numbers rise by 25% in December each year, but in the aftermath of the flight restrictions from the Omicron variant December 2021 saw a fall in aircraft handling, with a 36% dip in monthly passenger numbers, and overall, 64% less than the pre-Covid passenger levels. Mr Lewis reported that cargo had equally been adversely affected, down by 15% in December compared to pre-Covid, but strikingly January 2022 was down by 40%, to its lowest in seven years.

Mr Lewis explained that costs went up as players monopolised routes, drowning out the usual strong demand for perishable exports – but not the premium in freight charges.

“Knee-jerk reactions are very dangerous to our export freight supply chain that supports the perishable exports industry. If it is damaged by an unfeasible supply chain, it will take years to recover – or they could lose their businesses all together.”

Looking ahead, Mr Lewis believed the sector should be looking at sustained, stable growth at manageable rates, otherwise the ever-important flora and horticulture export industry for one will face even more challenges in the future.

Source: The Lordstar