KBRA releases commentary discussing the impact of airspace closures around the world that have resulted from the ongoing conflict between Russia and Ukraine, focusing on airlines’ potential financial losses from the Russian ban on Western flights transiting Russian airspace in addition to recent spikes in oil prices.

While North American airlines do not heavily rely on Russian airspace for international flights to Asia, most European carriers are facing a significant impact on their Asian networks as major, costly detours are required to continue serving these routes. This has led to flight cancellations as such routes become unprofitable, which has been exacerbated by higher jet fuel prices.

KBRA believes that this conflict, including the ongoing and potential expansion of airspace closures that have resulted from it, is credit negative for the already fragile recovery of long-haul international travel as the sector tries to recapture capacity from COVID-related declines. KBRA will continue to closely monitor events as they unfold and publish commentary as it relates to global aviation’s economic recovery.

Click here to view the report.

Related Publications

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• Russia-Ukraine Conflict: Potential Aircraft ABS Implications
• Russia’s Invasion of Ukraine: Initial Contours of Credit Risk
• Global Aviation 2022 Sector Outlook: Firm Fundamentals Amid a Turbulent Recovery

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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