A report that the Kremlin may restrict or ban European airlines from flying over Siberia has slammed the share price of Russian carrier Aeroflot.
The Russian business daily Vedomosti ran a story that Russia’s foreign and transport ministries were discussing possible action which could force EU airlines into long and costly detours, putting them at a disadvantage to Asian rivals.
That would be in response to Western sanctions imposed due to the Ukraine crisis.
On Wednesday, Russian Prime Minister Dimitry Medvedev said the government needs to discuss possible retaliation specifically against the EU’s airline sanctions.
Aeroflot’s shares tumbled because it reportedly gets the equivalent of around 225 million euros a year in fees paid by foreign airlines for the right to fly over Siberia.
State-controlled Aeroflot was the worst performing stock in Moscow on Tuesday, down 5.8 percent by mid afternoon, compared with a 1.0 percent drop on the broad index.
Russian low-cost airline Dobrolyot, which is operated by Aeroflot, has suspended all flights after its plane lease agreement was cancelled because the EU extended sanctions on the carrier for flying to Crimea.