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Russia Buys 92 Foreign-Owned Aircraft
The move allows Russian carriers to operate to foreign destinations without the aircraft being seized.
Moscow’s invasion of Ukraine put much of the aviation industry under pressure. Western airlines are now banned from overflying Siberia, the most optimal route possible between Europe and Far East Asia. On the other hand, Russian airlines in turn are banned from Western aviation supplies, assets, and maintenance.
The Industry Links
Russian airlines tied heavy knots of cooperation with the global aviation industry to fuel the growth and modernization of its fleets using Airbus and Boeing airplanes. At the beginning of the Ukrainian war of 2022, Reuters reported that Russian carriers were operating 980 passenger jets, of which 777 were leased. Of these, 515 jets with an estimated market value of about $10 billion were rented from foreign firms such as AerCap and Air Lease.
The Western sanctions quickly revealed themselves as a double-edged sword. As per their provisions, the aircraft leases between the Western-based leasing companies and the Russian airlines were set to be terminated by March 28, 2022, barely a month after the start of the invasion. This led to some aircraft being grounded in foreign countries and not seeing Russian soil to this day.
The consequence is that Russian airlines severely reduced their foreign destinations portfolio. The freed-up jets were used then to keep the ones flying in a working condition, as foreign maintenance and spare parts were no longer available for the sanctioned entities.
Nowadays, a budding aviation sector is key to a prosperous economy. Nowhere is this statement more apparent than in a country that spans eleven time zones like Russia. It takes an 8-hour-long flight to link the capital which lies close to the western border of the country with airports on the eastern side of the country such as Petropavlovsk-Kamchatsky Airport.
Russia, once a nation pioneering aviation, is now heavily reliant on Western technology. The most common Russian jet currently in production, the Sukhoi Superjet 100, is infamous for its accident history despite still being a limited number in operation. On top of that, the only possible engine powering the plane is produced by the PowerJet joint venture between Snecma (Safran) of France and NPO Saturn of Russia, which is not possible to sustain production given the scope of the sanctions.
Russian State Commitment
The light on the horizon is the Irkut MC-21, which is an aircraft type set to compete with the common Airbus A320 and Boeing 737 families. President Vladimir Putin expressed his optimism at the combined Direct Line Q&A session and year-end press conference.
“We need to develop our own aircraft production. I hope all plans, and we plan to make more than 1,000 our own airplanes by 2030 [….] will be implemented; specialists, pilots, and passengers will have on what to fly,” Putin said.
As a temporary solution to the issue, the Russian state has bought out another 92 airplanes from foreign leasing companies. Russia’s National Welfare Fund has laid out 190 billion roubles ($2.06 billion) for the purpose. Airlines will receive the aircraft through Russia’s state insurance company NLK-Finance which took the temporary ownership. The national carrier, Aeroflot, will secure 28 units while another airline, S7, will get as many as 45 of its formerly foreign-owned planes. Additionally, Ural Airlines will receive 19 units.
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