For bigger players, the cost of oil will have a much larger impact on their operations.
The skyrocketing price of fuel, large chunk of closed airspace and the remaining problems omicron brought to the industry are hitting the aviation sector, a new industry report has found.
Airlines that fly regular routes in and out of Russia and Ukraine are feeling the fallout particularly badly, as the airspace above the conflict zone is closed to commercial flights and passenger demand drops.
Local Operators Are Feeling It Most
Of those, Hungarian-owned budget line Wizz Air is by far the most affected, according to industry tracker Cirium Diio Mi, which tracks airline schedules, flight frequencies and passenger trends.
Wizz is traded on the Stoxx Europe 600 index under WIZZ, and 11% of its flights destined for Ukraine, Belarus and Russia.
After that, operator Pegasus Airlines, which is based in Turkey, is also losing money by the minute, with almost 6% of its routes destined for Russia, Ukraine and Belarus now scuttled.
Why Does This Matter For the Larger Market?
For bigger players, the cost of oil will have a much larger impact on their operations.
Long-haul airlines will feel the costs the most, but if they are part of a larger network, they can hedge that cost by stopping more often or reconfiguring their routes to refuel in sites outside the no-fly conflict zone.
Operators that could withstand the crisis the best include European operators British Airways-owned IAG, (KLM) , Lufthansa (DLAKF) , SAS and Air France (AFRAF) .
The multitude of routes they have, plus a connection to global travel networks, puts them in good stead to weather the crisis for now — but all bets are off if the conflict lasts longer than expected and oil prices head into more expensive territory.
