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EU airline shares drop on Russian airspace report

Published on NewsOK Modified: August 5, 2014 at 12:39 pm •  Published: August 5, 2014

MOSCOW (AP) — Shares in European airlines fell Tuesday on a report that Russia is considering cutting off the country's airspace for European flights to Asia, a move that would force long and costly detours.

A report published by the Russian business paper Vedomosti quotes anonymous Russian officials as saying this would be a response to the sanctions the EU imposed on Moscow. The officials say the idea of limiting or cutting off the airspace is being discussed but no formal decision has been made, according to the newspaper, a respected daily.

Shares in Finnair, which operates a lot of flights from Northern Europe to Asia, slumped 5.6 percent. Air France-KLM fell 3.8 percent while IAG, the owner of British Airways, saw a 2.9 percent drop.

"Carriers would experience longer flying times and higher expenses if forced to avoid transiting Russian airspace," said Robert Mann, an independent analyst. "Trips to destinations within Russian airspace would be canceled. Some rerouted trips might require technical stops for fuel. It would be a significant inconvenience to customers and have significant self-imposed costs to the Russian economy."

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