Russia-Ukraine Conflict

The forecast does not calculate the impact of the Russia-Ukraine conflict. In general, air transport is resilient against shocks and this conflict is unlikely to impact the long-term growth of air transport. It is too early to estimate what the near-term consequences will be for aviation, but it is clear that there are downside risks, in particular in markets with exposure to the conflict.

Sensitivity factors will include the geographic extent, severity, and time-period for sanctions and/or airspace closures. These impacts would be felt most severely in Russia, Ukraine and neighboring areas. Pre-COVID-19, Russia, was the 11th largest market for air transport services in terms of passenger numbers, including its large domestic market. Ukraine ranked 48.

The impact on airline costs as a result of fluctuations in energy prices or rerouting to avoid Russian airspace could have broader implications. Consumer confidence and economic activity are likely to be impacted even outside of Eastern Europe.