United, Delta Weigh Options on Threat of Siberia Flight Ban

Aug 07, 2014 5:16 pm ET

(Updates with index decline in seventh paragraph.)

Aug. 7 (Bloomberg) -- United Airlines and Delta Air Lines Inc. are evaluating options for rerouting flights should Russia carry through with a threat to close Siberian airspace to carriers from North America and Europe.

Such a ban is “on the table” as Russia considers next steps after barring imports of an array of foods from Europe, the U.S., Canada and Australia, Prime Minister Dmitry Medvedev told Russia’s cabinet today. Aviation manufacturing, shipbuilding and auto industries also may be targeted, he said.

Barring Siberian overflights would affect hundreds of weekly trips by North American and European passenger and cargo carriers. United, Delta and United Parcel Service Inc. said they were making contingency plans as Medvedev’s comments added to the rising tensions over the political crisis in Ukraine.

“We’re concerned that this ban will affect our ability to fly certain routes as currently planned,” Christen David, a spokeswoman for Chicago-based United Continental Holdings Inc., said by e-mail. “We are evaluating options for each route that may be affected.”

United hasn’t determined the number of its flights that may be covered by such a ban, David said. A Siberian restriction would alter flight paths for 12 Delta routes to and from the U.S. and Asia.

‘Alternate Routings’

“Delta is prepared to quickly make alternate routings around closed airspace if necessary,” Morgan Durrant, a Delta spokesman, said in an e-mailed response to questions. Atlanta- based UPS has plans to redirect jets, said Andy McGowan, a spokesman, without providing specifics.

Ten carriers in the 11-member Bloomberg U.S. Airlines Index fell today along with broader U.S. stock gauges. JetBlue Airways Corp., which doesn’t fly across the Atlantic, was the only airline on the index that gained.

Russia’s actions are in response to sanctions imposed by the U.S., European Union and other countries over the standoff in the Ukraine and the downing of a Malaysian Airline System Bhd. plane. Medvedev already imposed a ban on Ukrainian aircraft flying over Russia.

“Aviation is a global industry with airlines around the world using overflights every day in the course of transporting people and goods,” said Victoria Day, spokeswoman for Washington-based Airlines for America. “It would be unfortunate if Russia made a decision that would have the unintended consequence of impacting people and economies around the world, including its own.”

IATA, American

The International Air Transportation Association trade group for global carriers declined to comment on the financial impact the sanctions could have on European and U.S. airlines.

American Airlines Group Inc., the world’s largest carrier, said some of its flights traverse Russian airspace and declined further comment. FedEx Corp., operator of the world’s largest cargo airline, said flights in the region are operating normally now and that it’s monitoring the situation in Russia.

Broad Siberian airspace restrictions would harm European carriers more than U.S. airlines, said Daniel Friedenzohn, assistant professor at Embry-Riddle Aeronautical University in Daytona Beach, Florida. Germany’s Deutsche Lufthansa AG alone operates about 180 flights a week in the region, he said. That tally tops 200 when units such as its Swiss Airlines are counted.

“With that amount at stake, it could get pretty expensive and that’s just from a fuel standpoint” as airlines are forced to take longer routes around Siberian airspace, Friedenzohn said.