Russia would be the biggest loser if it carried out a threat to ban Western airlines from flying over its territory, Richard Branson, the founder of British airline Virgin Atlantic, said on Friday.

"It would cost us quite a lot of money but it would actually cost Russia more money. They charge enormous amounts of money for the privilege of flying over Russia," Branson told Reuters Television on the sidelines of a conference in Kiev.

Russian Prime Minister Dmitry Medvedev signalled on Monday that Moscow might ban Western airlines from flying over its territory as part of an "asymmetrical" response to new European Union sanctions over the Ukraine crisis.

A new wave of EU and U.S. sanctions came into effect on Friday as the West steps up pressure on Russia, accusing it of fomenting the conflict in eastern Ukraine and arming rebels battling Kiev's forces. Moscow denies the accusations.

"What is interesting is that the European Union to date have not charged Russian airlines anything for the privilege of flying over Europe. So I think Russia would lose a lot more than European airlines if they impose that," said Branson.

He added that the EU would almost certainly retaliate to a flight ban with a similar move against Russian airlines.

Asked how his own airline would respond to such a ban, Branson said: "If we have to fly around Russia we will have to fly around Russia. And you know obviously we are ready to do that. But I'd rather fly around Russia than see people being killed in Ukraine. I think that has got to stop."

Virgin Atlantic is 51 per cent owned by Branson.

Last month, Branson organised an open letter signed by Western, Ukrainian and Russian businessmen calling on governments in Kiev, Moscow and Western capitals to "compromise and find a peaceful solution to the current conflict".

On Friday he reiterated his call for greater efforts to end the five-month conflict, in which more than 3,000 people have been killed and hundreds of thousands displaced.

A ceasefire agreed one week ago between Ukrainian government forces and pro-Russian separatists has been broadly holding in recent days, despite sporadic violations. – Reuters