Vladimir Karnozov

The European Commission on Monday added 21 Russian airlines to the EU Air Safety List, banning Aeroflot, S7, UTair, and 18 others from EU skies in yet another move to sanction Moscow for the invasion of Ukraine. Last month, the U.S. and EU demanded that all European lessors terminate their relationships with Russian carriers and that Russian airlines return all leased aircraft—more than 500 in total—to their owners in the West. Russian airlines’ refusal to comply resulted in 78 jets being seized at airports around the world.

 


To save the remaining fleet, the Kremlin instructed the airlines that they can return their aircraft to lessors only after acquiring explicit permission from the Russian defense ministry and the Federal Security Service.

 


On March 31, President Putin held a special governmental meeting on the airline industry in which participants concluded that Russian jetliner operators and manufacturers suffered “consequences of inadequate decisions by the Western countries.” The European and U.S. companies refused to carry out their obligations on earlier signed agreements pertaining to maintenance of jetliners made in their respective jurisdictions, he said.

 


“The truth is, they have cheated their Russian partners by terminating deliveries, leasing, services, and insurance for airplanes,” he proclaimed. “Nevertheless, Russia is not going to close its doors to the outside world.”

 


The Kremlin believes the national carriers shall be able to transport over 100 million passengers in 2022 by intensifying inner services to compensate for a drop in the international traffic caused by Western sanctions.

 


Putin urged his government to provide financial aid of 100 billion to 110 billion Roubles to the ailing airlines to help keep them afloat, and extra funds to local manufacturers. Meanwhile, the government has promised to come up with a comprehensive program to support the local airline industry through 2030 under&nbsp;the understanding that “there will be no return to the mutually beneficial old terms of cooperation with our former partners any time soon.”

 


Russia’s transportation ministry has cleared 193 airplanes for international services, including 148 SSJ100s and 45 foreign-made aircraft considered safe to fly abroad&nbsp;without fear of seizure. None of them belong to a leasing company from “unfriendly countries.” Lessors who acknowledge the Russian national flight safety and maintenance system own some. Russian airlines, local businessmen, or leasing arms of Russia’s largest banks own the remaining.

 


UTair appears to possess most of the cleared Boeings: twenty 737s and a 767. Aeroflot comes next, with ten 737-800s and several A321s.

 


The Kremlin has held talks with a number of countries seeking guarantees of trouble-free operations into their airports and safe return of Russian-operated Airbuses and Boeings. Those efforts could add several dozen aircraft to the Russian fleet, especially those completely owned by airlines but nonetheless possibly targeted by Western lessors seeking compensation for losses on other jets.

 


In early April, the EU said it would let Russian airlines keep airplanes taken on financial lease terms from European lessors after they pay all rentals and the residual sums. Should the Russian side take that opportunity, it might add up to 100 more jets to the cleared list. However, most other imported jets are on operational lease.

 


Local manufacturers promise to assemble 500 new civil airplanes by 2030, mostly Irkut MC-21-310 and Tupolev Tu-214 narrowbodies, Irkut SSJ-NEW regional jets, and Ilyushin Il-114 turboprops. They expect to build only a few Ilyushin Il-96s, meaning Russian airlines appear faced with an acute shortage of widebody aircraft. Meanwhile, the SSJ100-NEW jets are ill-suited for most of the popular international services, such as those to holiday resorts in Egypt and the UAE, a problem the Russian airline industry appears likely to face for years to come.

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