Korean Air and Asiana Airlines Reroute Flights Around Russian Airspace... Increased Corporate Logistics Issues and Customer Inconvenience (Summary 2)

Korean Air Suspends Russia Routes Until April... Uses Detour Routes
Asiana Also Halts Flights to Russia... HMM Stops Maritime Transport
Airlines Face Increased Costs and Inevitable Customer Inconvenience

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Hyun-seok] As Russia's invasion of Ukraine prolongs, air and sea routes are being blocked. Korean Air and Asiana Airlines have decided to suspend flights on Russian routes, and HMM has also temporarily halted operations on Far East routes.

As airlines avoid Russian airspace and use detour routes, the burden of increased fuel costs due to high oil prices grows heavier, and passengers are expected to experience longer flight times. Additionally, concerns are rising that the logistics crisis for domestic companies struggling with parts supply will worsen.

According to industry sources on the 15th, Korean Air has decided to temporarily suspend passenger flights on the Moscow and Vladivostok routes and cargo flights via Moscow on European routes until the end of April, considering concerns about local airport operations and safety due to the Ukraine situation.

Earlier, Korean Air had temporarily suspended passenger flights on the Moscow route, which operated once a week every Thursday, as of 1 a.m. on the 5th (local time 7 p.m. on the 4th), due to reasons such as fuel supply unavailability at Moscow Airport, until the 18th. Cargo flights to Europe were also operated without transiting Moscow until the 18th.

For routes departing from Europe and the U.S. East Coast, detour routes will be used. European routes include London, Paris, Amsterdam, and Frankfurt, while U.S. East Coast routes include New York, Atlanta, Chicago, Washington, Boston, and Toronto. European routes will transit through China, Kazakhstan, and Turkey, and U.S. East Coast routes will use detour routes passing through the Alaska Pacific.

Asiana Airlines will also avoid transiting Moscow. Asiana Airlines operated cargo flights to Europe via Moscow seven times a week but does not operate passenger flights to Russia. Like Korean Air, it plans to use detour routes avoiding Russian airspace for European and U.S. East Coast flights. An Asiana Airlines official said, "The end date for using detour routes is undecided. We will decide after monitoring the situation."

Fuel Cost Burden Increases and Passenger Inconvenience Inevitable Due to Detour Flights

Air Busan also announced that it will suspend flights to and from Vladivostok, Russia, from today until mid-next month. This airline currently operates the Incheon-Vladivostok route once every two weeks on Saturdays. It has decided to suspend six scheduled flights from the 19th to April 15th.

Both airlines are expected to change some European-bound aircraft to models capable of longer flights due to detour routes and adjust airport takeoff and landing schedules. Especially amid soaring oil prices, increased flight distances will significantly raise fuel consumption, increasing cost burdens. According to the International Air Transport Association (IATA), as of the 11th of this month, jet fuel prices in the Asia region were $123.20 per barrel, up 74.2% from March last year. Fuel expenses are estimated to increase by about 20% when using detour routes.

Passenger inconvenience is also inevitable due to longer flight times on flights between Incheon and Europe. Flight times for European flights are expected to increase by about 1 hour 30 minutes to 2 hours 45 minutes one-way when using detour routes compared to existing routes. The Incheon→Paris route flight time will increase from 12 hours 30 minutes to 14 hours 35 minutes, an increase of 2 hours 5 minutes, and the Incheon→Frankfurt route will increase from 12 hours to 14 hours 15 minutes, an increase of 2 hours 15 minutes. For the Atlanta→Incheon route, which uses the Pacific route instead of the Arctic route, flight time will increase from 15 hours 10 minutes to 16 hours.

Some speculate that if airlines' cost burdens increase, airfares may rise. Airlines facing increased fuel expenses due to detour routes might raise ticket prices to reduce losses.

Air and Sea Routes to Russia Suspended One After Another... Corporate Logistics Crisis Deepens

Following air routes, sea routes have also come to a halt. HMM, the largest container shipping company in Korea, has temporarily suspended operations on Far East routes to Russia. An HMM official said, "Due to a sharp decline in cargo volume caused by the Russia-Ukraine situation, difficulties in operations have arisen, leading to the unavoidable temporary suspension of bookings."

HMM stopped accepting reservations for services to Saint Petersburg on the 28th of last month. The suspended routes include Busan∼Vostochny and Busan∼Vladivostok. Until now, a 1,700 TEU (1 TEU equals one 20-foot container) class container ship from HMM was deployed on the Vostochny route. For the Vladivostok route, HMM used the cargo space of another shipping company operating vessels of the same size.

The cargo capacity on Russian routes is minimal compared to HMM's total capacity, so the impact is expected to be minor. A company official explained, "This decision is unrelated to sanctions against Russia. We will monitor market conditions and work toward resuming services."

With air and sea routes being blocked one after another, the logistics crisis for companies is expected to worsen. Domestic major companies are likely to face disruptions in parts supply as logistics routes are blocked amid already difficult parts and raw material procurement.