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The Shock Doctrine: How Russia’s Attack on Ukraine Is Changing the Global Travel Industry

On February 24th, the world, having just begun to recover from the covid-induced cataclysms, was once again shocked to its core. The Russian army invaded Ukraine and thus, something once unimaginable – a full-scale military operation in the middle of supposedly prosperous and peaceful Europe – has become reality with very tangible consequences.

First of all, we would like to express our deepest condolences to all those impacted by the tragedy, especially the friends and relatives of those who died during the conflict. According to the UN, over 1.5 million people have already become refugees and fled from their home country. The economic consequences of such a massive dislocation, as well as the sanctions of unprecedented scale imposed on Russia, will be tremendous. Here is what it is likely to mean for the global travel sector.

Perhaps, the first obvious losses will be borne by the aviation industry, whose players will fall prey to serious ramifications as the result of the increasing calls for a no-fly zone and general Russian attacks on Ukraine. Russia has already banned civilian airplanes from Germany and 35 other states as a response to the EU prohibiting Russian planes from flying over or landing in Europe.

East-west flight routes are now expected to be blocked or severely altered. According to Wolf-Dietrich Kindt of the German Aviation Association (BDL), "Flights bound for the Far East, which typically pass over Russia, need to bypass the area using alternative routes. This means flights will take longer and cover greater distances, which increases fuel consumption and costs for carriers." Further pressure on the aviation industry will be exerted due to the rapid spike in the oil prices, which are now surpassing the $100 (€90) per barrel mark.

Another sector likely to experience severe consequences is cruise lines. Soon after the Norwegian Cruise Line scrapped all trips to Russia, TUI Cruises, MSC Cruises, and AIDA Cruises followed suit. None of their vessels will be calling at St. Petersburg port this year. Phoenix Reisen, a German agency offering ocean and river cruises, has called off tours along Russia's Volga River in April and May, with further steps following, if need be, according to their spokeswoman.

Overall, it may be too early to estimate the sheer scale of the ramifications due to Russia’s military attack on Ukraine. Nevertheless, it is already clear that the consequences will be devastating for certain sectors of the economy – the last thing needed for all those displaced or in any way hurt by the conflict. We sincerely hope that the fighting stops as soon as possible, and peace comes back to everyone’s lives.

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