Russia mulls retaliation after sanctions hit Crimea airline

Russian Prime Minister Dmitry Medvedev (top) inspects a Boeing 737-800 NG, owned by Dobrolet airline, with Minister of Transport Maxim Sokolov (right, bottom) and Aeroflot CEO and Director General Vitaly Savelyev (second right, bottom) seen in the fo
Russian Prime Minister Dmitry Medvedev (top) inspects a Boeing 737-800 NG, owned by Dobrolet airline, with Minister of Transport Maxim Sokolov (right, bottom) and Aeroflot CEO and Director General Vitaly Savelyev (second right, bottom) seen in the foreground, at Sheremetyevo International Airport outside Moscow on June 10, 2014. Russia is considering retaliating against Western nations after new sanctions grounded a subsidiary of flagship carrier Aeroflot over the Ukraine crisis, Prime Minister Dmitry Medvedev said on Tuesday, Aug 5, 2014. -- PHOTO: REUTERS

MOSCOW (AFP) - Russia is considering retaliating against Western nations after new sanctions grounded a subsidiary of flagship carrier Aeroflot over the Ukraine crisis, Prime Minister Dmitry Medvedev said on Tuesday.

Aeroflot's low-cost subsidiary Dobrolet which flew to Crimea, annexed by Russia in March, said on the weekend it was forced to ground all its flights because of EU sanctions hitting its leases for Boeing aircraft.

"We need to discuss possible retaliatory steps," the Russian prime minister said in remarks released by his office as he convened a meeting with the transport minister and a top Aeroflot executive.

A report in a respected business daily said Russia was mulling a total or partial ban on European airlines flying over Russia to Asia.

The Vedomosti newspaper, citing several sources, said the transport and foreign ministries were discussing a ban that could affect Lufthansa, British Airways and Air France - as well as Aeroflot, which receives the fees gathered from European airlines for the overflight rights.

Bank of America Merrill Lynch estimates those fees bring in around $250-$300 million per year for Aeroflot, or a third of the company's operating profit.

Aeroflot, the transport ministry and airline regulator Rosaviation declined to comment on Vedomosti's report or what possible retaliation was being considered.