Air links: how a country connects to its markets, and what closing them costs

Air connectivity is one of those infrastructure questions that looks secondary until it is removed. Ukraine's experience over the past fifteen years provides an unusually clean demonstration of what it is worth.

What was built

Before 2012 the market was thin: a national carrier, a handful of foreign flag carriers into Kyiv, and very little at the regional airports. Fares were high, frequencies were low, and a business trip from a regional city to a European capital usually meant routing through Kyiv with an overnight.

Three things changed that. The Euro 2012 airport programme rebuilt the terminals at Kyiv, Lviv, Donetsk and Kharkiv. Low-cost carriers arrived and expanded aggressively from around 2014. And visa liberalisation in 2017 removed the administrative barrier that had suppressed outbound demand.

The result was a step change. Lviv in particular went from a marginal airport to a genuine regional hub with direct services across Europe, and the effect on the city's software sector recruitment and on inbound tourism was immediate and measurable.

Why air access matters more for some economies than others

Three specific reasons, all of which apply here.

Services exports need people to travel. A software company selling delivery capability, an engineering consultancy, a design studio — all of them close business in person and deliver partly on site. Cheap frequent flights are an input to that trade in a way they are not for a commodity exporter.

Tourism is almost entirely a function of air access for a country without a coastline that people drive to. The correlation between route additions and visitor numbers is close to one-to-one.

And labour mobility. When a work opportunity abroad requires a twelve-hour bus journey, fewer people take it. When it requires a two-hour flight at a low fare, more do. Air links cut both ways for a country with an emigration problem.

The closure

Ukrainian airspace closed to civil aviation in February 2022 and has remained closed. Everything that moved by air now moves by road to a Polish, Romanian, Moldovan or Hungarian airport, adding somewhere between six and fourteen hours to a journey depending on origin and crossing queue.

The cost falls hardest on exactly the sectors that grew fastest before: services businesses, whose client visits became expensive and slow, and any trade in high-value or time-sensitive cargo.

What reopening requires

This is worth setting out because the sequence is not obvious.

Airspace reopening is a regulatory and safety decision, not simply a political one. It requires an aviation authority determination, insurer willingness to write hull and liability cover for the airspace, and carrier route decisions that are made against a commercial case with a multi-year horizon.

Insurance is the binding constraint in practice. War risk cover for aircraft is written by a small market, and it prices on demonstrated rather than declared safety — the same dynamic that operated in Black Sea shipping.

Carrier decisions follow insurance rather than leading it, and route development runs eighteen months to two years from decision to first flight even in normal conditions.

What to plan for

For a business with Ukrainian operations, two practical points.

Do not build a plan that depends on a specific reopening date. Build one that works with ground transport and improves if air access returns.

And note that the first routes to return will be to the western airports, on carriers with existing Ukrainian market knowledge, at frequencies well below 2021. Full recovery of the pre-war network is a multi-year process even in a favourable scenario, and the regional airports will lag Kyiv considerably.

Related in this archive

• The 2019 transit deal: what European rules actually bought Ukraine
• The Kharkiv accords: why a gas discount for a base lease was a bad trade
• Energy as a strategic variable: generation, storage, transit and interconnection
• Ukraine Annual Review 2015: the worst year and the most reform

I live this every month. There were years when Kyiv was a day away; the same journey now means a border queue, a night coach and a plan spread over two days. The real cost is not the fare but the delay placed in front of a decision — and the first thing to catch on that delay is the visit by the investor who has not yet made up their mind.