* Any Siberia ban would force EU carriers into costly
* Aeroflot gets overflight fees, shares tumble
* Russians suffer miserable summer as tour firms fold
* Sanctions ground billionaire's private jet
(Adds analyst comments on cost to airlines)
By Maria Kiselyova and Gleb Stolyarov
MOSCOW, Aug 5 Russian Prime Minister Dmitry
Medvedev threatened on Tuesday to retaliate for the grounding of
a subsidiary of national airline Aeroflot because of EU
sanctions, with one newspaper reporting that European flights to
Asia over Siberia could be banned.
Low-cost carrier Dobrolyot, operated by Aeroflot, suspended
all flights last week after its airline leasing agreement was
cancelled under European Union sanctions because it flies to
Crimea, a region Russia annexed from Ukraine in March.
"We should discuss possible retaliation," Medvedev said at a
meeting with the Russian transport minister and a deputy chief
executive of Aeroflot.
The business daily Vedomosti reported that Russia may
restrict or ban European airlines from flying over Siberia on
Asian routes, a move that would impose costs on European
carriers by making flights take longer and require more fuel.
Vedomosti quoted unnamed sources as saying the foreign and
transport ministries were discussing the action, which would put
European carriers at a disadvantage to Asian rivals but would
also cost Russia money it collects in overflight fees.
Shares in Aeroflot - which according to Vedomosti
gets around $300 million a year in fees paid by foreign airlines
flying over Siberia - tumbled after the report, closing down 5.9
pct compared with a 1.4 percent drop on the broad index.
At the height of the Cold War, most Western airlines were
barred from flying through Russian airspace to Asian cities, and
instead had to operate via the Gulf or the U.S. airport of
Anchorage, Alaska on the polar route.
European carriers now fly over Siberia on their rapidly
growing routes to countries such as China, Japan and South
Korea, paying the fees which have been subject to a long dispute
between Brussels and Moscow.
Vedomosti quoted one source as saying a ban could cost
airlines like Lufthansa, British Airways and
Air France 1 billion euros ($1.3 billion) over three
months, but industry experts said that figure was probably too
Avoiding Russian airspace would probably be 25-50 percent
more expensive than paying fees for transit, said Russian
aviation consultant Boris Ryabok, estimating European airlines
would lose around $100-200 million per year, less than the cost
to Russia of the lost fees.
Lufthansa said it operates about 180 flights a week through
Siberian airspace but declined further comment, as did British
The EU has widened its sanctions after last month's downing
of a Malaysian airliner over territory in eastern Ukraine
controlled by pro-Moscow rebels, with the loss of 298 lives.
The suspension of the airline flying to Crimea prevented
Russians from taking cheap holidays on the Black Sea peninsula
at resorts such as Yalta. This has added to a miserable summer
during which a series of Russian travel companies have gone
under as the economy flirts with recession and the rouble falls.
Itar-Tass reported on Tuesday that the IntAer travel
operator had become the latest to fold, stranding about 500
holidaymakers abroad. The company blamed "a sharp fall in demand
and purchasing power and the rise in the exchange rates of
foreign currencies and the negative political situation".
Russians have been increasingly taking holidays in countries
such as Greece, Croatia, Bulgaria, Turkey and Egypt. However,
the rouble has fallen 9 percent this year against the dollar due
to the slowing economy and the effects of the crisis in
relations with the West, forcing up the cost of foreign trips.
Around 15,000 tourists are stuck abroad following the
collapse of the larger Labirint holiday firm, although industry
officials have promised customers will be compensated from
insurance policies which the companies had to take out.
A Greek tourism official said the country expected 1.1
million Russian tourists this year, down from 1.35 million in
2013. Arrivals from Ukraine, where government forces are
battling the rebels in the east, are down 50 percent.
Andreas Andreadis, who heads the Association of Greek
Tourism Enterprises, expected this would cost the country 300
million euros ($400 million). Greece still aimed to boost
numbers of Russian visitors to 2.5 million a year by 2021, he
said, but added "Things look like they will be getting worse
before they get better."
While the mass travel market suffers, sanctions imposed by
the United States have targeted individuals close to Russian
President Vladimir Putin.
Billionaire Gennady Timchenko said U.S. company Gulfstream
had stopped servicing his private plane. "Gulfstream has ceased
to fulfil its contractual obligations, grounding my jet which
had been purchased from it for a lot of money," he told
ITAR-TASS news agency in an interview.
Gulfstream had been banned from any contact with Timchenko,
he said, and could no longer supply spare parts. Pilots had also
been banned from using the jet's navigation system.
However, Timchenko said Russia's business elite would not
put pressure on Putin to change tack on Ukraine due to the
sanctions which would only strengthen support for his policies.
($1 = 0.7452 Euros)
(Additonal reporting by Katya Golubkova, Victoria Bryan, Sarah
Young and Renee Maltezou; Editing by David Stamp and Peter