JNN 8 Aug 2014 Moscow : Russian Prime Minister Dmitry Medvedev threatened on Tuesday to retaliate for the grounding of a subsidiary of national airline Aeroflot because of EU sanctions, with one newspaper reporting that European flights to Asia over Siberia could be banned.
Low-cost carrier Dobrolyot, operated by Aeroflot, suspended all flights last week after its airline leasing agreement was cancelled under European Union sanctions because it flies to Crimea, a region Russia annexed from Ukraine in March.
“We should discuss possible retaliation,” Medvedev said at a meeting with the Russian transport minister and a deputy chief executive of Aeroflot, Reuters reported on Wednesday.
The business daily Vedomosti reported that Russia may restrict or ban European airlines from flying over Siberia on Asian routes, a move that would impose costs on European carriers by making flights take longer and require more fuel.
Vedomosti quoted unnamed sources as saying the foreign and transport ministries were discussing the action, which would put European carriers at a disadvantage to Asian rivals but would also cost Russia money it collects in over flight fees.
Shares in Aeroflot – which according to Vedomosti gets around $300 million a year in fees paid by foreign airlines flying over Siberia – tumbled after the report, closing down 5.9 pct compared with a 1.4 percent drop on the broad index.
Vedomosti quoted one source as saying a ban could cost airlines like Lufthansa, British Airways and Air France 1 billion Euros ($1.3 billion) over three months, but industry experts said that figure was probably too high.
Avoiding Russian airspace would probably be 25-50 percent more expensive than paying fees for transit, said Russian aviation consultant Boris Ryabok, estimating European airlines would lose around $100-200 million per year, less than the cost to Russia of the lost fees.
Lufthansa said it operates about 180 flights a week through Siberian airspace but declined further comment, as did British Airways.
The EU has widened its sanctions after last month’s downing of a Malaysian airliner over territory in eastern Ukraine controlled by pro-Moscow rebels, with the loss of 298 lives.
New import bans in sanctions stand-off
Meanwhile, Russia extended food import bans to Romania, stepping up its response to more biting Western sanctions for its support for separatist in Ukraine.
Russian veterinary watchdog Rosselkhoznadzor said on Wednesday it was suspending beef and cattle imports from Romania, citing an outbreak of mad cow disease.
Moscow has already imposed bans on Ukrainian juice and dairy produce, Polish vegetables and Australian beef and has said it might target Greek fruits and U.S. poultry.
Moscow’s trade bans follow new sanctions against Russia’s banking and energy sector imposed by the West, which accuses the Kremlin of financing and supplying arms to rebels in eastern Ukraine who are fighting for independence from the government in Kiev.
4 million Ukrainians are in danger
In another event, senior UN official warned that ongoing violence in Ukraine will affect four million people living in the country’s east as water and power supplies have sustained significant damage.
John Ging, director of UN humanitarian operations, said at an emergency meeting on Tuesday that violence, especially in urban areas, will put more people at risk and lead to “an increase in the numbers killed” if a political solution cannot be reached. Al Jazeera reported.
He warned the Security Council that the humanitarian situation in eastern Ukraine is steadily worsening as power and water supplies become scarce, homes are destroyed and health workers flee.
“Immediate action is therefore required to prevent this,” he told council members.
In Donetsk and Luhansk, the water supply has been cut to a few hours per day, health supplies are running low and an estimated 70 percent of health personnel have fled, he said.
Vitaly Churkin, Russia’s UN ambassador, said the situation in the east, particularly in Luhansk and Donetsk, is “disastrous”.
He accused the Ukrainian military of indiscriminate shelling of housing.
In many small towns, he said, 80 percent of the houses have been destroyed and hundreds of buildings have collapsed.
Churkin said Russia wants to send a humanitarian convoy to Luhansk and Donetsk under the auspices of the International Committee of the Red Cross.