Russia Muscles Astana? Or Just Berlin?

by Joshua Foust on 11/9/2007 · 7 comments

For a few weeks or so, I’ve been puzzling over what may have caused Russia to revoke overflight rights for Lufthansa Cargo flights to East Asia. Knowing Lufthansa maintains a hub in Astana, it wasn’t clear exactly what the Central Asia connection could be if it was merely, as I had suspected, an attempt to gouge more fees from the German carrier.

I misjudged them. It seems Russia wanted Lufthansa’s hub to be in Russia, and not Kazakhstan—Krasnoyarsk or Novosibirsk. After going into detail about the treaty-breaching behavior of Moscow in this case—including the lack of negotiation, the ultimatum, and the lack of warning—and how Germany is playing from a really weak hand, Vladimir Socom explains just what would be involved if Lufthansa goes through with this:

Should Lufthansa refuse to switch its hub from Kazakhstan to Siberia, its cargo business would instantly lose access to Russian air space. Alternative air routes circumventing Russia to fly to Kazakhstan and onward to Central Asia would be longer and correspondingly more costly in terms of fuel, delivery times, crew work hours, and wear-and-tear of planes. Lufthansa Cargo’s profitability would decline and its competitive edge would also suffer.

Switching the hub from Kazakhstan to Siberia would also involve onerous investment costs on Lufthansa. The German company would have to build modern infrastructure at Krasnoyarsk and/or Novosibirsk, if forced to switch its ground-based hub there. Those airports are affected by severe winter weather, involving safety risks and imposing high operating costs on the German company if it moves its hub there. Russia would have its airports modernized at the German company’s expense — a method that the Russian government is said to plan imposing on Western companies at a number of Russian airports.

Moreover, such costs “would hit far beyond Lufthansa itself,” according to Lufthansa Cargo CEO Carsten Spohr. German exporting companies, “and consequently Export Nation Germany, would be affected.” Even Klaus Mangold, a leading advocate of the German-Russian mutual-economic-dependence concept, observes that denial of access to Russian air space is part of a “power game that Russia is already pursuing with regard to energy” (Welt am Sonntag, November 4).

Well, yes. Even so, this is a heinous and arbitrary move. What’s more, Kazakhstan is losing all of the money Lufthansa now pays to maintain its hub at Astana. I’ve been unable to find any numbers, but it is a safe bet Lufthansa not only spent a considerable sum expanding the airport at Astana, but that it pays Kazakhstan a considerable sum to maintain its operations there. Now all of that is gone, thanks to Russian perfidy.

And I’m sure Gerhard Schroeder thought he was being oh so clever in building Nordstream. For Germany’s sake, I guess.


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This post was written by...

– author of 1849 posts on Registan.net.

Joshua Foust is a Fellow at the American Security Project and the author of Afghanistan Journal: Selections from Registan.net. His research focuses primarily on Central and South Asia. Joshua is a correspondent for The Atlantic and a columnist for PBS Need to Know. Joshua appears regularly on the BBC World News, Aljazeera, and international public radio. Joshua's writing has appeared in the Columbia Journalism Review, Foreign Policy’s AfPak Channel, the New York Times, Reuters, and the Christian Science Monitor. Follow him on twitter: @joshuafoust

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{ 7 comments }

mcmachismo November 9, 2007 at 11:11 am

Russia is muscling just all over its former soviet states. What serious response can Kazakhstan really come back with though?

T November 9, 2007 at 3:47 pm

Now tell me again why Germany couldn’t imply an interesting quid pro quo regarding Aeroflot landing fees in Berlin?

Michael Hancock November 9, 2007 at 3:52 pm

They really could. Russia is in for a rude awakening one day when they realize that they don’t own the patent on being colossal dicks in the global world of business.

They won’t always have all the cards.

Kazakhstan may not be the force of action here — my money is on Berlin to bite back hard, just so long as Lufthansa can make it clear that this kind of treatment deserves the harshest response.

Joshua Foust November 9, 2007 at 3:54 pm

The Jamestown.org article also relates a bit of what Berlin tried:

On November 1, the German side announced that it would suspend the landing rights of Aeroflot and an allied Russian airline, Tesis, at Hahn Airport in western Germany, for as long as Lufthansa Cargo is denied access to Russian air space. Aeroflot and Tesis use Hahn Airport for approximately 30 flights per week in loading and unloading operations, which are linked to highway and railway transportation in that region. Aeroflot promptly threatened to move its operations to nearby Luxemburg, if suspended from using Hahn.

Hahn is located in the German federal state (Land) of Rheinland-Pfalz, whose Chief Minister Kurt Beck serves concurrently as leader of the Social-Democrat Party. Unwilling to risk losing some of the ground transportation business and jobs linked to Russian air operations in his bailiwick, Beck quickly intervened through party channels to withdraw the German countermeasure. Minister Tiefensee, also a Social-Democrat, yielded to Beck as he did to Moscow, restoring Russian use of Hahn Airport on November 2.

In other words, it was a vote-grab by a local politician that in this case undid it. Which means, Germany did not consider this enough of an issue to sacrifice an election internally. So they didn’t use their counter-leverage.

T November 9, 2007 at 5:14 pm

So I guess we’ll see if Herren Merkel can play hardball … maybe play some EU card vs the Russians?

Russian Bear November 10, 2007 at 8:23 pm

Lies, lies lies….
You. guys, will lie to just say something nasty about Russia, right?

MOSCOW, Nov 2 (Prime-Tass) — Russia’s Transportation Ministry said in a statement Friday that it has extended Lufthansa Cargo’s overflight permit until November 15, a move that at least temporarily puts an end to a ban on flights by the German airline’s cargo flights through Russian airspace.

Russia banned Lufthansa Cargo flights October 27 after the German company opposed a Russian proposal to move its cargo hub to a Russian city from Astana in Kazakhstan. The ban does not affect Lufthansa passenger flights. Initial reports following the ban suggested the dispute was focused on overflight fees.

According to the ministry’s statement, German aviation authorities have promised by November 7 to choose either Krasnoyarsk or Novosibirsk in Siberia as a cargo hub for Lufthansa Cargo flights to Southeast Asia.

The Russian ministry said Friday that, according to a protocol of intent signed by Russian and German aviation authorities in February, Lufthansa was supposed to have chosen either airport before June 25, but failed to do so.

Weekly, some 20 Lufthansa Cargo flights departing from Frankfurt fly over Russia on the way to Astana, Kazakhstan, and Tashkent, Uzbekistan, Dow Jones Newswires reported earlier this week citing a spokesman for the airline. The spokesman said these destinations are important hubs and refueling stops on the way to Asia.

Russia and the E.U. have been at odds over Russian overflight fees for foreign airlines. Russia agreed to phase out the fees by 2013 but has not yet signed an agreement scrapping the fees. Russian aviation authorities are widely expected, however, to significantly increase air navigation fees over coming years bringing them in line with the European average.

End

atom1 November 13, 2007 at 3:02 am

we luv russians and their wimen.
and you make great trade partners,
for example the purchase of the Alaska territory/now state.

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