How The Russia-Ukraine Conflict Is Impacting Latin American Aviation

Russia’s invasion of Ukraine could have an impact on the Latin American airline industry in terms of added costs, uncertainty, and reluctance to fly, according to experts speaking during the International Air Transport Association’s (IATA) Wings of Change event.

Russia’s invasion impact on the airline industry
Over the last six weeks, Russia has invaded Ukraine, and the airline industry has been both directly and indirectly impacted by the events. From leasing companies losing billions in assets currently stuck in Russia to the destruction of Ukraine’s one-of-a-kind Mriya An-225, the examples are varied.

While most of the impacts remain in the Europe and Asia regions, other far-away countries are feeling the impact. The most obvious effect is the ongoing increase in fuel prices everywhere, including aviation fuels. The crude oil price peaked at US$120 per barrel a few weeks ago, and it is currently higher than it was at any point in the last seven years.

The rise in jet fuel prices is worrying the airline industry and governments worldwide. Earlier this week, the White House National Economic Council Director, Brian Deese, said the administration is monitoring the prices that could threaten the air travel recovery. As reported by Reuters, he said,

“Jet fuel is something that we are paying close attention to and monitoring and is a direct bi-product of the impact of Russia’s invasion of Ukraine.”

So, how is that related to Latin America?
During a CEO panel at IATA’s Wings of Change, the general directors of Aerolíneas Argentinas, Avianca, and LATAM discussed the subject.

Pablo Ceriani, head of the Argentinian State carrier, said,

“We are dealing (with the impact of the war in Ukraine) as we can. We don’t have much choice. Nonetheless, we are optimistic. We would like to think that this process (i.e., the invasion) will not last for much longer and will not escalate, creating further damage than it already has.”

He added that Russia’s war in Ukraine is not only rising fuel prices but it is also adding uncertainty to an already uncertain scenario after the COVID-19 pandemic.

Roberto Alvo, CEO of LATAM Airlines Group, the largest carrier in the region, said the airline industry will have to keep an eye, watching out for any impact between the ongoing recovery and the fuel price.

“The highest cost for any airline is fuel and, undoubtedly, it will impact the velocity of the recovery in this post-pandemic environment. We will have to see if the developments in Ukraine do not impact travel demand. Because of that, we already see some impact in Europe,” he said…

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