Just as you think nothing can get worse, it does. I’m not talking about the Hong Kong government’s management of the Covid-19 pandemic. I’m talking about aviation. I marvelled last week at the impossibly measured patience of Cathay Pacific as it reported stupendous losses and the depressing absence of light at the end of any tunnel. The melancholic lyrics of the 1968 Beatles ballad Blackbird sprang to mind: “Take these broken wings and learn to fly … into the light of the dark, black night.” I am impressed and perplexed that after more than two years of extraordinary adversity, Hong Kong’s flag carrier not only manages to survive but is able to maintain a brave face. How many companies do you know of that could survive despite passenger levels falling to just 2 per cent of normal? Thank goodness for air cargo. Cathay has been forced to dismiss 5,900 staff . It reported losses of HK$5.5 billion (US$702.8 million) in 2021 – welcome only set against the 2020 losses of HK$21.6 billion. It expects monthly losses of HK$1.5 billion until Hong Kong’s quarantine lockdown comes to an end. Chairman Patrick Healy offers comfort that the airline had HK$30.3 billion in liquidity as of December 31. However, he did not pause to point out that at the current rate of cash burning, all liquidity will be gone by the middle of 2023. Then, just as cracks of hope began to appear for improving aviation prospects towards the end of 2022, Russia invaded Ukraine . Thousands of lives have been lost, the peaceful existence of millions of people across Europe has been overturned and fears of global war have awakened. Hopes of a long-awaited recovery from the Covid-19 depression have been crushed. As with the pandemic, aviation and international travel have become accidental victims caught in the cross hairs of the conflict. The conflict has closed air space across Europe, with 36 countries blocking overflight by Russian aircraft . Sanctions against Russia have shaken the business of Russian airlines. Soaring oil prices have clobbered airlines worldwide: fuel normally accounts for about a third of their costs – second only to staff costs. Airlines without fuel-hedging contracts in place can expect a difficult year ahead. If I thought there could be no airline worldwide facing such acute challenges as Cathay Pacific, now I must think again. Russia’s national carrier Aeroflot, S7 and other Russian commercial airlines have been barred from much of international airspace. Of the 880 aircraft they operate, around 70 per cent come from Boeing or Airbus, according to the consultancy Ascend by Cirium. Both have cut off service contracts and supplies of all spare parts. So have Rolls-Royce, Safran, GE Aviation and Brazil’s Embraer. How long Russia’s airlines can continue to operate without spare parts and servicing is unknown. Cirium also says 515 of the 880 fleet are leased from European aircraft leasing companies, most of which are now seeking to retrieve their aircraft. Details of how they can repossess their aircraft are unclear, but no Russian-operated aircraft will be flying out of Russian air space any time soon. World’s largest plane destroyed by Russian strikes outside Kyiv As if this was not bad enough for the Russian operators, insurance and reinsurance cover is being withdrawn. They are being locked out of code-share deals and back-end systems such as flight planning and sales systems. This includes software that optimises efficiency and safety by balancing an aircraft’s weight, baggage, fuel and cargo. So just as organisations such as the International Air Transport Association (IATA), the International Civil Aviation Organisation (ICAO) and others were beginning to signal the beginnings of recovery from the Covid-19 pandemic, their forecasters have been forced back to the drawing board. For example, IATA forecast two weeks ago that overall air passenger numbers for 2022 would recover to 83 per cent of 2019 levels, despite some uncertainties arising from the Omicron surge since October last year. It predicted full recovery to 2019 levels by 2024, with the recovery in domestic travel leading international travel and the Asia-Pacific region lagging the rest of the world. In view of the uncertainty over how long the Ukraine invasion will last and how much collateral damage will be inflicted across Europe, none of these organisations have revisited their forecasts. For sure, though, forecasts will need to be revised radically downward. Hong Kong gives go-ahead to Greater Bay Airlines to fly 104 routes in Asia The shape of aviation activity worldwide has already been changed. From 4.5 billion air passengers worldwide in 2019, ICAO reported just 2.3 billion passengers last year. Airline losses amounted to US$372 billion in 2020 and US$324 billion last year, and in their more pessimistic scenarios – surely the more likely in view of the invasion of Ukraine – it forecast losses around US$200 billion this year. Since most of aviation’s recovery during the pandemic has come from domestic travel, the strongest recovery is expected in North America. ICAO already notes that 13 of the 15 busiest airports worldwide are now in the United States while Asian airports and airlines have dropped off the global leader board. Not only is China’s “zero-Covid” strategy having a sharp impact on Asia’s international travel activity, intercontinental flights into Asia have been severely disrupted by the closure of Russian air space. Finnair’s Asia services have been badly disrupted, with its shares sharply down. US airlines have restructured their Asia services, in particular to India. Gulf carriers such as Emirates and Qatar Airways, whose networks largely run south of the conflict zone in Ukraine, might suffer less damage to their operations. “We have dealt with the pestilence only to be visited with a war,” Ryanair CEO Michael O’Leary said. With commendable understatement, he added: “It’s going to be very difficult for most airlines for the next 12 months.” So Cathay Pacific is not alone. For the coming year at least, the only light is the dark, black night. David Dodwell researches and writes about global, regional and Hong Kong challenges from a Hong Kong point of view