On 21 September 2011, Dmitry Kamenshchik, chairman of Russia’s Domodedovo Group, stood in front of reporters and announced an ambitious plan to upgrade Domodedovo Airport, the largest airport in the former USSR, as part of a $3.9-billion investment programme.

A third runway would be built, the landing apron revamped, transport links significantly upgraded and a whole new commercial centre built to accommodate the new travellers – estimated at the time to constitute upwards of 15,200 an hour. And although Domodedovo is privately owned, the Russian Federal Government represented a significant partner: the project was a vote of confidence in the country’s continued economic growth and the increasing role the airport would play as a regional transport hub.

"We have four sources of investment: ourselves, the federal government, the regional government and private investors," Kamenshchik told press. "Together, these sources give us enough money to cover all our projects over the next ten years.
"None of this would be possible without the support of all kinds of government departments and ministries. Are we happy with our relationship with the federal government? Yes, we are."

Airlines understand that people simply can’t travel. They’re losing salaries, losing their jobs – of course this is the first thing they say no to.

But these days, Kamenshchik is probably less happy with the Kremlin. It has spent the best part of the past decade spending millions of dollars on runways, terminals and new commercial facilities to meet the rapidly growing needs of customers, yet flights between Russia’s capital and Europe, the Middle East and the US have seen a massive decline. And in the face of the steeply declining demand, many international airlines are beginning to cut down, deciding that it’s just not worth it.

The decline
"Airlines understand that people simply can’t travel," Irina Tyurina, a spokesperson for the Russian Tourism Union, told The Wall Street Journal. "They’re losing salaries, losing their jobs – of course this is the first thing they say no to.
"In 2008 and 2009, the last crisis, we saw a drop in trips [organised by tour operators] of about 25-30%, and we thought that was a catastrophe. In 2014 we have up to an 80% drop in demand for certain trips abroad – about 60-70% on average. This is totally unprecedented."

The drop has been significant. Domodedovo recorded a 7% decline, with 1,442 fewer flights in March 2015 than in the same month the previous year. Moscow’s Sheremetyevo, too, reported a 5.1% decrease in passengers travelling on international flights.

Many blame the ongoing decline in the value of the rouble. In part driven by the continued global oil glut and a perpetually low crude price – an indicator on which Russia is heavily dependent – the value of the country’s currency has continued to slump, making travel abroad prohibitively expensive for Russian citizens. In December 2014, it fell 50% against the dollar, and it hasn’t recovered significantly since then.

This has happened in the past, of course, with operators having cut back on the size of their planes – as Alexis Rodziano, president of the American Chamber of Commerce in Russia told The Wall Street Journal in April 2015.
"But they always kept the flights," he said. "This is much more drastic than anything I’ve seen them do before."

Global consequences
Foreign companies doing business in Russia have felt the squeeze. Delta, for example – the only American airline that operates in the country – announced earlier this year that it would be ending its Moscow to New York flights because "demand has been negatively impacted by the decline in oil prices".

Others followed suit, either announcing significant reductions to flights or scrapping them altogether: Easyjet, for one, announced it will almost halve its visits to Russia in 2015, and in October, Germany’s second largest airliner, Air Berlin, announced it would be suspending all journeys to the country.

"Due to the declining demand for flights from the beginning of this year, Air Berlin has changed its flight programme to Russia several times," the company said in a statement. "The demand did not manage to match expectations, so it was decided to cancel flights to Russia.

"Flights between Dusseldorf and Moscow, as well as between Berlin and Kaliningrad, will be cancelled step by step during the next few months."

It hasn’t just been European or American airlines that are cutting back on flights to Russia. The high-end Qatar Airways is making savings, and Air India is reducing its Delhi-to-Moscow flights from daily to twice a week. In June, Cathay Pacific Airlines ended its routes to Moscow altogether, citing "commercial reasons" and "high operating costs", a move that followed a similar decision by Thai Airlines and budget carrier Air Arabia.

But there’s another obvious reason for Russia’s increased isolation and the decline of its air traffic: the continued economic and diplomatic consequences of the country’s involvement in the conflict in Ukraine, and the EU sanctions that have followed. While this has affected internal demand, of course, it has also had an impact on the amount of foreigners coming to the country to do business. St Petersburg, for example, has seen a 7% drop in hotel occupancy, and numerous companies are pulling their employees out of the country.

"In the last couple of years, growth slowed in Russia, and added to that you had the geopolitical situation in Ukraine and the decline in oil prices," said Rodzianko. "That had reduced the number of new businesses openings, which typically have a larger expat contingency."

Some are bucking the trend, however, and many Middle Eastern and Chinese carriers are actually increasing the frequency of their flights to Russia, particularly to destinations in Asia. In May, for example, Sichuan Airlines began flying from Chengdu to Moscow and, despite the country’s troubled economy, Etihad Airways has announced that it will increase freight capacity and the frequency of trips from Abu Dhabi and the broader UAE.

"Currently, besides the Russian airlines flying to China, there is also the active presence of Air China, China Eastern, China Southern, and Hainan Airlines," said the executive director of the World without Borders Tourist Association, speaking to Russia Beyond the Headlines to point out that Russia’s regional airports are more connected than ever to Asian markets.

A geopolitical issue
This has a lot to do with trade stepping up to compensate for losses incurred by EU sanctions, but it’s also tied to increased tourism from these countries. It’s a direct reflection of how geopolitical shifts impact airline routes: as the country’s leadership drifts away from the West, so too does its connectivity.

It would have meant a return to Cold War flight routes – the days when Western airlines couldn’t fly over the USSR in order to get to Asian cities…

In August 2015, as sanctions imposed by the EU began to bite, Russian airliner Dobrolyot, a subsidiary of Aeroflot, was forced to halt all its flights after its leasing agreements were unilaterally suspended by the EU. The reason? The airline ran routes to the disputed region of Crimea, which many were claiming Russia had annexed. Prime Minister Dmitry Medvedev was furious.

"We should discuss possible retaliation," he told his transport minister and a deputy chief executive of Aeroflot.
One newspaper reported that Russia’s response would be tough: European airlines might have been banned, or at least heavily restricted, from flying over Siberia – a decision that would have forced them to expend significant resources on longer-haul flights, but would have cost Russia a fortune in overnight fees. It would have meant a return to Cold War flight routes – the days when Western airlines couldn’t fly over the USSR in order to get to Asian cities and had to instead use the Gulf or go via the US.

It was a sign of how much had changed in the last year or so that such a move was even discussed, and it’s still not unforeseeable: with the West holding strong against Putin and the Kremlin looking east, this could be the new normal. The question is: are airlines ready for it?