LONDON – New start-up Belgian carrier Air Belgium is struggling to acquire overflight permits, which as a result is putting delays on the overall operation of the carrier. With some of the operations headed to China and beyond, Russian airspace is the only permit the carrier has not acquired.
For its flights to Hong Kong, it has to overfly nine different countries in order to make it. The carrier’s A340’s wouldn’t be able to fly around the airspace as it would add an hour and a half to the flight, thus putting it into danger of fuel starvation, especially on the return legs when the flights are facing a headwind.
The carrier has already had to give compensation to passengers without even starting operations yet: “We are talking about less than a thousand people because Chinese tourists are travelling via a tour operator and are not concerned,” Nicolas Boulart, the spokesman for Air Belgium.
Why have the refusals taken place?
It is unclear why the Russian government has decided to refuse the permit to Air Belgium. However, with the latest tensions taking place between the UK and other EU member states, this could be another way of destabilising elements of the European Union.
Air Belgium delays inaugural Brussels Charleroi-Hong Kong flight from 30 Apr to 3 June. Air Belgium blames:
1) Russia overflight. Air Belgium says permit secured but not granted
2) GDS implementation pic.twitter.com/iDLcu3pXJ7
— Will Horton (@winglets747) April 26, 2018
Russian Diplomats had also been expelled from Belgium, which could show the refusal as a response by the Russian side. This delay could be financial comeuppance for the expulsion at the expense of a privately invested carrier.
The airline CEO Niky Tersakis believes that they should get the permit soon, especially as he has said that the airline has completed all of the other extra requirements that the Russians have been asking for. This was apparently done way in advance of any other political tensions ongoing between the EU and Russia.
The airline is also struggling with the financial and operative end of the spectrum too. The Russian overflight refusals are not much of a help to their current situation at the moment. The airline is currently being under-capitalized and has a current capital value of 18.6 million Euros, which shows that it requires more finances in order to operate viably.
Secondly, the partners of the airline, SRIW and SFPI have arranged for the airline’s four Airbus A340-300 aircraft to be based at Brussels South Charleroi Airport, where the airstrips are too short for the aircraft to take off fully laden, which provides an operational and safety challenge if they want to operate on a long-haul basis. For Charleroi, it is a cheaper alternative to Air Belgium instead of going through the main Brussels airports instead. They do however need to find that fine balance.
Finally, the engines of the A340-300’s, the CFM-56-5, are no longer in demand, which means that the cost of maintenance is significantly higher than those who have aircraft where the engines are still in demand.
With the airline struggling with all of these problems, the approval of the Russian overfly permit is crucial to being able to launch what they think will be prosperous routes and operations. At the same time, they require investors to be a little more lenient and provide the actual amount of capital needed to preserve, save and sustain the airline into profitability in the long run.