Russia may restrict or ban European airlines from flying over Siberia on busy Asian routes, a newspaper reported Tuesday, following Western sanctions which have grounded one Russian carrier and a billionaire's private jet.
Vedomosti quoted unnamed sources as saying the foreign and transportation ministries were discussing possible action that might force European Union airlines into long and costly detours and put them at a disadvantage to Asian rivals.
Later on Tuesday President Vladimir Putin ordered his government to prepare retaliatory measures against the latest round of Western sanctions, Russian news agencies reported.
“Of course, it should be done carefully in order to support domestic producers and not hamper consumers,” he was quoted as saying.
Shares in Russian carrier Aeroflot — which, according to Vedomosti, gets about $300 million a year in fees paid by foreign airlines flying over Siberia — tumbled after the report.
The Transportation Ministry and the civil aviation authority declined to comment on the possibility of responding to the EU sanctions imposed due to the Ukraine crisis, which were tightened last week.
At the height of the Cold War, most Western airlines were barred from flying through Russian airspace to Asian cities, and instead had to operate via the Gulf or the U.S. airport of Anchorage, Alaska, on the polar route.
However, European carriers now fly over Siberia on their rapidly growing routes to countries such as China, Japan and South Korea, paying the fees that have been subject to a long dispute between Brussels and Moscow.
The daily quoted one source as saying a ban could cost carriers including Lufthansa, British Airways and Air France 1 billion euros ($1.3 billion) over three months. Restrictions would lead to longer flights, higher fuel use and other additional costs.
However, state-controlled Aeroflot would also be hurt if it lost the fees. Aeroflot was the worst performing stock in Moscow on Tuesday, down 5.8 percent at 6 p.m. In Moscow, compared with a 1.4 percent drop on the broad index.
Lufthansa said it operates about 180 flights a week through Siberian airspace but declined further comment, as did British Airways.
The EU widened its sanctions, imposed originally over Russia's annexation of Crimea in March, after last month's downing of a Malaysian airliner over territory in eastern Ukraine controlled by pro-Moscow rebels.
Russian low-cost airline Dobrolyot, run by Aeroflot, suspended all flights last week after its plane lease agreement was cancelled because the EU extended sanctions on the carrier for flying to Crimea.
Sanctions imposed by the U.S. have also targeted people close to President Vladimir Putin.
Billionaire Gennady Timchenko said U.S. company Gulfstream had stopped servicing his private plane. "Gulfstream has ceased to fulfill its contractual obligations, grounding my jet, which had been purchased from it for a lot of money," he told ITAR-Tass in an interview.
Gulfstream had been banned from any contact with Timchenko, he said, and could no longer supply spare parts. Pilots had also been banned from using the jet's navigation system.
However, Timchenko said Russia's business elite would not put pressure on Putin to change tack on Ukraine due to the sanctions, which would only strengthen support for his policies.