Travel

How Russia’s invasion of Ukraine could hurt the resumption of travel

How Russia's invasion of Ukraine could hurt the resumption of travel

(CNN) — This year was meant to be a year of recovery for a travel industry hit hard by the global coronavirus pandemic. But Russia’s invasion of Ukraine may have just changed that.

After two years of disrupted travel due to ever-changing Covid-19 restrictions, airlines and tour operators are once again bracing for closed skies, cancellations and a cloud of uncertainty over international travel.

More … than 30 countries have so far closed their airspace to Russia, with Moscow reacting accordingly. Russia’s Civil Aviation Authority announced on Tuesday that it had closed its airspace to carriers from at least 37 countries. Airspace over Ukraine, Moldova and parts of Belarus also remains closed.
In the short term, this means escape cancellations or one derivation air routes. But the long-term consequences for the travel industry could be far greater. Here’s why:

Rising fuel prices will drive up travel prices

Global crude oil prices jumped to over $110 a barrel on Wednesday as investors feared Russian energy exports could be limited or halted due to the conflict in Ukraine.

These price spikes will make any type of trip more expensive. Coupled with potentially longer air routes that require more fuel as they bypass closed Russian airspace, the higher prices will eventually have to be passed on to the consumer.

Europe’s largest airline, Lufthansa, said detours to Asia would cost a “single-figure amount of one million euros” per month. Speaking to reporters during a company results update On Thursday, Lufthansa chief financial officer Remco Steenbergen said the carrier will have to raise ticket prices to offset rising fuel prices and other costs.

A spike in tariffs could lead to lower demand — and that’s bad news for an industry already struggling to make up for pandemic-related losses, let alone inflation.

Security fears could weaken demand

Rising fuel prices will inflate passenger tickets. As well as a drop in demand caused by fears of conflict.

STEFANI REYNOLDS/AFP via Getty Images

The European Aviation Safety Agency, known as EASA, has warned of a “high risk” civilian aircraft flying near the Ukrainian border. The airspace over Russia, Belarus, Poland, Slovakia, Hungary, Romania and Moldova is also on the risk list.

The EASA on Friday doubled the size of the warning zone around Ukraine, fearing that “medium-range missiles could enter controlled airspace”. The agency added, “in particular, there is a risk of both intentional targeting and misidentification of civilian aircraft.”

EASA warning won’t be taken lightly after Malaysia Airlines flight MH17 was shot down over eastern Ukraine in 2014, killing 298 people. Investigators said the missile that shot down the plane was fired from a launcher belonging to Russia’s 53rd anti-aircraft missile brigade.

For many travelers and crew members already spooked by coronavirus concerns, the thought of flying anywhere near a conflict zone may be too much.

“It is likely that destinations close to Russia will suffer as consumers fear the proximity of war, even if this is irrational, based on no declared threat from Russia,” Olivier Ponti, vice-president, told CNN. president of analytics for travel analytics firm ForwardKeys. .

“The US market will likely be significantly deterred from visiting Eastern Europe and deterred, although not quite as much, from visiting Western Europe,” he added.

Covid-19 still exists and the refugee crisis could make it worse

We are still living in the midst of a global pandemic with country-specific travel and quarantine restrictions. Travel organizations had called on governments to lift Covid-19 travel restrictions as vaccinated societies hoped for a return to “normal”. However, the World Health Organization has warned the conditions on the ground in Ukraine and the resulting refugee crisis will facilitate the spread of the coronavirus.

Airbnb co-founder and CEO Brian Chesky told CNN’s Matt Egan that his company is committed to helping address the refugee crisis.

“Anytime you disrupt society like this and literally displace millions of people, infectious diseases will exploit that,” said Dr Mike Ryan, director of the World Health Organization’s Health Emergencies Program. , during a press conference on Wednesday.

“People are huddled together, they’re stressed and they’re not eating, they’re not sleeping properly. They’re very susceptible to impact, first of all by being infected themselves. And the disease is much more likely to spread .”

UNHCR says more than two million people have been forced to flee their homes and estimates that “up to four million people could leave the country in the coming weeks if the conflict continues”. The effects of a potential spread of the virus to neighboring countries could make governments less likely to ease Covid-19 restrictions, which will keep pressure on the travel industry.

Loss of tourist revenue

Turkey is one of the destinations that suffer many cancellations from Russian travelers.

Turkey is one of the destinations that suffer many cancellations from Russian travelers.

Chris McGrath/Getty Images

According to the Association of Tour Operators of Russia (ATOR), Russians have earned more than 10.1 million tourism-related trips abroad in 2021. ATOR told the Russian state news agency that 46.5% of the total tourist flow to 32 open states was destined for Turkey, with Russian tourists making 4.7 million trips in the country last year.
And those tourism dollars looked set to flow through 2022. The latest Data from travel analytics firm ForwardKeys showed that Russian outbound flight bookings for March, April and May had recovered to 32% of pre-pandemic levels, before the invasion of Ukraine, Turkey, the United Arab Emirates, Maldives and Thailand being the most booked destinations.

Everything changed with Russia’s war against its neighbour. The destinations that recorded the highest immediate cancellation rates during the period from February 24 to 26 are Cyprus (300%), Egypt (234%), Turkey (153%), United Kingdom (153%), Armenia (200%) and the Maldives (165%), company data shows. The absence of Russian tourists will deal a heavy blow to these heavily dependent tourist destinations.

It is important to note that not all countries have severed their ties with Russia. Flights from the country are still landing in places like Turkey, Thailand and Egypt at the moment, but Russia’s economic outlook is what keeps tour operators in these countries up at night.
Crippling Western sanctions sent the Russian ruble to new lows as ratings agencies Fitch and Moody’s downgraded Russia’s sovereign debt to junk status on Thursday morning.
As Russians’ savings lose value, it will also be harder for them to use globally recognized credit cards abroad when they do manage to travel. Companies like Visa and Mastercard said this week they were also working to enforce sanctions against Russia.
And, in another potential blow to the country, the World Tourism Organization is organizing a emergency executive council meeting next week to decide whether or not to suspend Russia’s membership and participation in the organization.

No one likes uncertainty

From investors to travellers, no one likes uncertainty. The war in Ukraine has increased uncertainty over whether port closures and shipping delays will limit deliveries of everything from raw wheat in cooking oil.

Travel stocks are also seeing their share price drop. International Consolidated Airlines Group, owner of British Airways, lost 5% in February. Lufthansa shares have fallen 14% since Russian forces entered Ukraine, with British airline EasyJet painting a similar picture.

The uncertainty over what will happen next in the conflict is also making people think twice about planned or existing travel plans.

“We’ve had customers call in for reassurance about how their trip is going and to check our flexible booking policy,” Matt Berna, Intrepid Travel’s general manager for North America, told CNN.

“Intrepid Travel is not currently running any tours that visit Ukraine or Russia, but in the short term we expect European travel sales to slow,” he added.

Of course, the planned vacation is in no way comparable to the plight of the Ukrainian people and the huge humanitarian catastrophe currently unfolding along its borders, but the impact that the Russian invasion of Ukraine could have on an already fragile travel industry is an impact that could be felt far and wide. in the future.

Top image: The Aeroflot check-in counter at Los Angeles International Airport on March 2. Credit: Mario Tama/Getty Images