EU airline shares drop on Russian airspace report

Moscow • 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 costly detours.

A report published by the Russian business daily 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 Vedomosti, a respected newspaper.

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.

Russia's state-controlled carrier, Aeroflot, was also affected as it charges European airlines some 300 million euros annually for the right to use Russian airspace. Its shares tumbled almost 6 percent.

The Russian Transport Ministry could not immediately be reached for comment. Prime Minister Dmitry Medvedev met Transport Minister Maksim Sokolov on Tuesday and said they would discuss recent actions against Russian airlines. "We need to discuss possible measures in response," he was quoted as saying by Russian news agencies.

Helen Kearns, the spokeswoman for the European Commission, the EU's executive arm, said there had been no official information on this from Russian authorities.

Russia could legally close its airspace if it wanted to, according to the EU Commission. Currently, each EU country has a bilateral deal on whether its airlines can fly over Russia.