Russia Threatens to Bankrupt Western Airlines by Closing Its Airspace

Russia is threatening a return to Soviet-era airspace restrictions in response to new European Union sanctions, a move that could force Western airlines to cancel flights or improvise complicated and expensive alternative routes.

On Monday, the EU signed off on additional sanctions to punish the Kremlin for incursions into Ukraine in recent weeks. In a statement, EU President Herman Van Rompuy said the sanctions targeting Russian oil companies — though not the gas producers that supply Europe with much of its energy — would take effect in the coming days.

The EU, however, said it would allow the sanctions to be reviewed in the future, pending the result of a ceasefire announced between the Kiev government and Russian-backed separatists in Ukraine's east.

Russia's Prime Minister Dmitry Medvedev said previously that such sanctions would trigger a response that could include blocking Western airlines from flying over Russian airspace. Russia's airspace is the world's largest, covering nine time zones from the Baltic to the Bering Sea.

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"If there are sanctions related to the energy sector, or further restrictions on Russia's financial sector, we will have to respond asymmetrically," Medvedev told the Russian news site Vedomosti. "We work on the basis of friendly relations with our partners, and that's why Russia's skies are open to flights. But if we are restricted then we'll have to respond."

"If Western carriers have to bypass our airspace, this could drive many struggling airlines into bankruptcy," said Medvedev.

Prior to the fall of the Soviet Union, Moscow banned most US-aligned countries from flying through its airspace. Under international aviation agreements, sovereign countries have the right to refuse entry to foreign aircraft.

"He's basically threatening to go back to the system that was in place," Robert Orttung, assistant director of the Institute for European, Russian and Eurasian Studies at George Washington University, told VICE News. "The Russians feel compelled to respond in ways that are not very productive. It would make Russia more of a pariah state."

It was unclear if Russia would include flights destined for Russia, not just those traveling through the country, in the potential restrictions.

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Aviation experts say a flight ban would cause hundreds of cancellations in the short term and over time could hold severe consequences for European-based airlines, especially ones that operate flights directly to East Asia.

"A lot of the flights we fly now didn't exist during Soviet times," R. John Hansman, director of the MIT International Center for Air Transportation, told VICE News. "For direct flights from Northern Europe to Japan, for example, you'd have to go south all the way to Afghanistan and cut across China, or you'd have to fly all the way over the North Pole to Alaska and turn back."

By Hansman's estimate, a route over the Arctic Circle could lengthen flight times by as much as 70 percent, effectively making them impossible logistically and financially — unless an Alaskan city such as Anchorage takes on a role as a transcontinental hub.

Airlines with hubs along southern routes to Asia, such as Emirates, could possibly stand to gain from increased ticketing due to the restrictions.

But mutually assured economic pain could preclude the use of airspace as a weapon for very long. Should Western countries and the US respond by ending flights to Russian cities — as they almost surely would — the Russian economy, already feeling the sting of existing US and EU sanctions, could be devastated.

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Following Russia's annexation of Crimea in March, the US, many European nations, and several other allies began levying sanctions that target individual companies and financial transactions in Russia. In April, the US expanded sanctions against Russia to include billionaires in President Vladimir Putin's inner circle. On the list were Igor I. Sechin, head of Rosneft, a Russian state-owned Rosneft oil company, and Sergei V. Chemezov, the director general of Rosetc, another state-owned company that oversees tech development.

Russia responded by imposing its own sanctions on high-ranking Western politicians, and banning imports of many US and European agricultural goods.

The existing sanctions have already hurt the Russian economy. In August, the Kremlin was forced to inject $6.6 billion in two state-owned banks. The government also cut projected 2016 revenues from state-owned energy giants Gazprom and Rosneftegaz by $18 billion.

A flight ban would ratchet stakes to levels reminiscent of the Cold War, when the USSR shot down several civilian airliners that entered its airspace. But Orttung believes Putin's gambit in Ukraine has extended him to the point where he cannot easily retract, making a flight ban not out of the question.

"He sees this as an existential issue, driven by domestic politics," said Orttung. "He's working very hard to maintain his popularity, but it's not getting any easier for him."

Follow Samuel Oakford on Twitter: @samueloakford