Russia has introduced a new law making it harder for foreign aircraft leasing companies to repossess their planes in the face of Western sanctions.
The new law will allow foreign jets to be registered in Russia “to ensure the uninterrupted functioning of civil aviation activities.”
Russian airlines have leased 515 jets from abroad, worth about $10 billion (£7.7 billion).
Foreign owners have until March 28 to get them back from Russian companies before sanctions come into effect.
The move comes after Bermuda and Ireland, where nearly all foreign-leased aircraft operating in Russia are registered, said they would suspend airworthiness certificates for those aircraft.
The measure, signed into law by President Vladimir Putin, could circumvent this by introducing registration and security certification within Russia’s borders and allowing the foreign planes to operate domestic flights across the vast country.
Since the February 24 invasion of Ukraine, Western companies have been terminating leases and demanding the return of planes.
The majority of international air routes from Russia are not flown, and many countries, including the UK, have banned Russia’s national carrier Aeroflot from flying in their airspace.
Hundreds of foreign-owned aircraft remain in Russia. To comply with the sanctions, leasing companies are trying to get them back. But that looks very unlikely.
If Russia holds on to these planes, which together are worth billions of dollars, they can keep flying, at least in Russia and a handful of former Soviet republics.
But it’s one thing to steal planes, it’s quite another to keep them in service for long periods of time.
Airbus and Boeing cannot supply spare parts. So if something needs to be replaced, it has to be taken from another plane or made by a third party.
This has serious security implications. In addition, it becomes practically impossible to insure these aircraft outside of Russia. Maintenance is also an issue – many planes are flown to another location for maintenance.
And when the crisis is over, there will be a huge bill to pay.
When planes are not properly maintained, their value decreases. Even if landlords get them back, they will demand compensation.
International aviation is an international business and you have to abide by the rules.
Russia could now decide to turn its nose up at the rest of the world. But one day they will want to rejoin the club – and the conditions for re-entry could be very harsh.
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