Air cargo helps Finnair restore some Asian services by flying over Russia
High freight rates are allowing Finnair to restore several long-haul passenger flights to Asia despite the added cost of detouring around Russia after the country closed its airspace to Western airlines.
The Helsinki-based carrier said on Monday it would resume service to Shanghai once a week from Thursday and three times a week to Seoul, South Korea, from Saturday. It also canceled flights to Osaka, Japan and Hong Kong until the end of April.
It is the third time in a week that Finnair has adjusted its schedule to close Russian airspace in response to European Union sanctions for the invasion of Ukraine that ban all Russian planes.
On February 27, the company temporarily canceled service to Seoul, Osaka, Tokyo, Shanghai and Guangzhou, China – and Hong Kong until the end of March – to determine its options, saying bypassing Russian airspace was not economically viable as the extra flight time adds significant fuel, personnel, and navigation costs.
It also stopped flying to Moscow and St. Petersburg, Russia.
Flight time for the new Shanghai and Seoul routes, which avoid Russian airspace, will be 12 to 14 hours, depending on management. Both routes bypass Russia from the south, and the return flight from Seoul to Helsinki can also take the northern route, Finnair said.
Flying around Russia between Helsinki and Tokyo adds five hours, according to air traffic management organization Eurocontrol.
“The further freight price increase currently allows passenger services to continue to Finnair’s core Asian markets, even with longer flight times,” the airline said in a press release.
According to the Freightos Air Index, China-Northern Europe fares jumped 34% last week to $8.40 per kilogram, just below the previous year’s level when shipments after Chinese New Year were particularly strong. Globally, the average spot rate jumped 26 cents, or 6.4%, to $4.31 per kilogram over the past week.
Freightos Air Index for China-Europe (100-300 kg)
Finnair operates Airbus A350s and A330s on its long-haul routes. Wide-body aircraft have plenty of luggage space and large amounts of cargo in the hold.
Finnair announced last week that it would resume operations to Tokyo four times a week from Helsinki from Wednesday, as Japan is one of its most important passenger and cargo markets.
Finnair continues to serve Bangkok and Phuket, Thailand; Delhi; and Singapore with routes that avoid Russian airspace.
The airline warned last week that it could furlough several hundred crew members due to reduced flights caused by Russia’s war on Ukraine.
Finnair’s challenges are a microcosm of the airline industry as it still tries to recover from the COVID crisis, with expectations of a strong summer season now under threat.
On Friday, Lufthansa Cargo CEO Dorothea von Boxberg said eliminating Russian all-cargo operators from the Asia-Europe trade lane and shifting freight to fuel to keep planes in the air longer will result in a loss of 10% of freight capacity.
Direct air freight capacity between Europe and North East Asia fell by 20% in the aftermath of the Russian invasion, translating to more than 1,100 tons per day, according to consultancy Seabury. , the equivalent of nine Boeing 747 freighters that are no longer available. .
The rapid loss of capacity is putting upward pressure on freight rates.
But the biggest impact on airlines and shippers from the Russian-Ukrainian war is the price of jet fuel. On Monday, the average oil price rose above $130, with some analysts predicting $185 a barrel on the horizon. Benchmark data from the International Air Transport Association shows that the price of jet fuel, through last Friday, jumped 27.5% in one week to $141.70 a barrel and nearly doubled over the past the last year. A week earlier, the price per barrel of jet fuel was $111.
Airlines have responded by applying fuel surcharges to their freight bills.
Clickk here for more FreightWaves/American Shipper stories by Eric Kulisch.
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