Russia does not negotiate with terrorists, President Vladimir Putin said, after President Volodymyr Zelenskiy warned airlines that Ukrainian drones would make Russian airspace unsafe.

"I hadn't heard such statements, but if this was said publicly, then it amounts to a declaration of state terrorism," Putin said of the Ukrainian warning, during a press conference in Bishkek at the SCO summit. "Kyiv is asking for negotiations to resume and for face-to-face meetings, but we do not negotiate with terrorists."

Putin has hardened his line since he warned that Ukraine had opened a “Pandora’s box” by targeting Russian retail warehouses. Now the aviation threat adds to his rejection of the talks Ukraine has been asking for. It will also lead to an escalation and retaliation Putin went on to describe, having first put a price on what Ukraine's summer campaign has already cost him.

While Putin has recently admitted for the first time that the Ukrainian campaign is doing damange to Russia’s economy, he down played the cost and highlighted that Russia’s disproportional retaliation was doing proportionally far more damaged to Ukraine’s economy. He emphasised Ukrainian strikes damaged about 100 ships over 40 days and cost Russia the equivalent of about 1% of gross domestic product, Putin said, calling the damage significant but not critical. People were killed, including citizens of Azerbaijan and Turkey. He did not explain how the 1% was calculated or what it covers, UkrAgroConsult noted.

"They opened Pandora's box themselves," Putin said, warning that Ukraine had since "felt the threat to its economy". He put Ukraine's imports at about $8bn a month against about $3bn of exports, with the remaining $5bn covered by Western assistance. "That's how Ukraine survives," he said. "I'm not saying that we will bring down the economy. But there are three possible crises: currency, budgetary and banking."

The threat was not confined to Ukraine. "If someone tries to drag us down the food chain and gobble us up, devour us, they may end up getting their teeth knocked out," Putin said. "And Russia is ready to do that, despite the rapidly growing appetites and teeth of these sharks."

Putin was responding to threats Zelenskiy made in a video message broadcast the previous evening. "Today, we want to warn every airline using Russian airspace, every insurer, and everyone still operating through key Russian airports: Russian airspace is becoming increasingly dangerous," he said. "There will be drones in Russian skies, and this must be taken into account. Although Russian authorities are not properly informing people about it, Russian airspace will effectively be shutting down. The war launched by Russia is closing its own skies."

He was careful about what he was not saying. Ukraine does not target civilian aircraft, he said, but drones would be in Russian airspace and Russia would increasingly have to close it, and he did not want innocent lives lost, which was why airlines and partners were being warned in advance. Embassies in Kyiv and Moscow were told to take the message back to their capitals, along with airlines flying to Moscow, St Petersburg and other major Russian destinations.

Zelenskiy also confirmed the US has asked Kyiv to halt drone attacks on Moscow for three days during the visit of CIA director last week. The United States asked Ukraine to stop striking Moscow and St Petersburg between August 25 and 27, he said, and Ukraine agreed, while Russia kept striking Ukraine. Further meetings in Moscow were coming and Ukraine would take that into account.

Civilian aircraft in a war zone

The issue of shooting down civilian aircraft is a highly sensitive question and Zelenskiy has reportedly been thinking about making this threat for many months. His decision to make it now adds an aura of desperation that has been building up as Ukraine’s air defence ammo runs out and the population face the prospects of an intense Russian bombardment this winter that has already begun.

The gap between "Russian airspace is becoming dangerous" and "we will shoot down your aircraft" is an acknowledgement of the sensitivity of the idea, since the MH17 tragedy, a commercial Malaysian flight, that killed just under 300 people after it was shot down by mistake over Ukraine in July 2014 . A warning to insurers is an economic weapon and a tool in Tehran’s arsenal in its war with the US after it mined the Strait of Hormuz, just the threat of which caused insurers to halt traffic: it raises war-risk premiums on every route into Moscow and St Petersburg, and it can empty a schedule without a single drone going near a passenger jet. An actual strike on a plane becomes unnecessary. The threat of striking is enough to force insurers to suspend their cover which grounds planes.

On July 17, 2014, in the first year of the war in the east, MH17 was destroyed over Ukrainian territory by a Soviet-made Buk surface-to-air missile (a lively debate followed as to if it was supplied by Russia or part of the Soviet legacy arsenal), killing all 298 people on board. A Dutch court convicted three men in absentia over the downing in 2022, and found the missile system had been brought in from Russia. The episode remains the single most damaging aviation incident of the conflict, and it was Russia that spent years denying responsibility for it.

If a Ukrainian drone brings down an airliner full of Russian civilians, the propaganda return to the Kremlin would be immediate and enormous, and it would land on the country that has spent three years arguing it is the one obeying the rules. The warning to airlines and insurers is an attempt to get the deterrent effect of closed skies while leaving the responsibility for closing them with Moscow, which is precisely what "the war launched by Russia is closing its own skies" was meant to mean.

Whether it works depends on how carriers and their underwriters read it, and on whether Ukraine's drone campaign against Russian airports and refineries continues at a tempo that makes the warning self-evident. Putin's reply suggests he intends to treat the warning itself, rather than any strike that follows it, as the thing that ends the talks.