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After emerging relatively unscathed by Omicron, airlines now have to factor in near $100 oil prices. Image Credit: Shutterstock

Dubai: The Ukraine conflict dash any hopes of a quick recovery for global airlines, as an important flight route is shut off and oil prices hovering around $100 a barrel.

With Ukrainian airspace closing on Thursday, major UAE airlines join their global peers in suspending or re-routing their flights. “In times of increasing jet fuel prices, the Russia-Ukraine crisis is a major headache to the entire aviation industry still in a post-Omicron recovery,” said Linus Benjamin Bauer, Founder and MD of Bauer Aviation Advisory. “A large portion of uncertainty has returned.”

Fuel, which represents the single biggest element of an airline’s cost, has become dearer in recent months as signs of an economic rebound supported global crude prices. Major energy exporter Russia’s involvement in the Ukrainian conflict has now taken oil past the $100 mark (it dropped to $95 early Friday).

It’s not just the input costs - Ukrainian skies are now off bounds and that means airlines have to take longer routes. “For airlines operating flights between Europe and Asia, it means rerouting to bypass Ukrainian airspace with added flight time and jet fuel, making these routes less economically viable with already lower seat load factors due to pandemic,” said Bauer.

The latest setback could even affect flight capacities and travel demand in the short-term. “The escalation of events in the Ukraine is deeply saddening - we hope for an early and peaceful resolution,” said Willie Walsh, IATA’s Director-General. “IATA is helping to facilitate the relevant and timely sharing of information with airlines from government and non-government sources to support airlines as they plan their operations around airspace closures in the Ukraine and parts of Russia.”

UAE airlines halt flights

flydubai, which operates a double daily service to Kyiv and three weekly flights to Odessa, has suspended flights between Dubai and Ukraine until March 8. Emirates airline, which does not operate direct flights to Ukraine, announced that its partners - flydubai and S7 have suspended certain flights to Russia and Ukraine due to the closure of airspace over these areas. Etihad Airways, which too does not have any direct flights to Ukraine, has rerouted flights away from the border region.

“Etihad continues to completely avoid Ukrainian airspace, and as a precautionary measure, has rerouted flights away from the border region to the east and north of Ukraine by a considerable distance,” an airline spokesperson told Gulf News.

From January to May 2021, Dubai received 55,000 visitors from Ukraine and 185,000 visitors from Russia, according to official data.

With its relatively warm winters, Dubai has traditionally been a destination of preference for tourists from Ukraine and Russia. Due to improved flight connectivity, Ukraine had also emerged as a favorite holiday spot for UAE residents. Earlier this month, the UAE Embassy in Ukraine Kyiv called on UAE nationals to postpone travel to Ukraine

Growing optimism

Prior to the Russia-Ukraine war, airlines were optimistic about their recovery chances, with the Omicron variant less severe than previously thought. According to a recent IATA survey, the majority of airlines expect passenger numbers to pick up despite Omicron and they cited further relaxation of travel restrictions and more efficient pandemic containment as the key drivers. The survey also showed that pressure on airline profitability had diminished in the latest quarter with the industry poised for a gradual recovery this year.

“However, respondents were more cautious than in the previous survey due to the Omicron impact, soaring jet fuel prices and rising market competition that puts pressure on yields,” said IATA.

International passenger demand in 2021 was 75.5 per cent below 2019 levels. Capacity (measured in available seat kilometers or ASKs) declined 65.3 per cent and load factor fell 24 percentage points to 58 per cent, according to the International Air Transport Association (IATA).