Combat affects flight: Russia loses access to 79 jets and orders fleet nationalization

Russian air carriers have lost access to 79 aircraft since the start of sanctions imposed by Western countries after the invasion of Ukraine.

In fact, the companies were not the real owners of these planes. All owned or managed by international charter companies that were worried about getting their jets back with the war.

Contracts with Russian airlines were canceled on March 28 with a package of sanctions.

In total, 515 aircraft were leased to the Russians before the invasion of Ukraine. That’s why the 79 rescued still represents a low figure, according to Cirium, an aviation data analytics company.

So far, companies have only managed to save aircraft outside of Russia.

What is a rental?

Buying an airplane is very expensive. A Boeing 777-330ER, for example, can cost up to $100 million depending on how long it’s been in use.

That’s why airlines often charter their planes. Here’s how it works: companies rent the jets for a monthly fee, but they don’t own the plane.

This monthly amount, which is usually kept confidential but can exceed US$ 300,000, is paid to the leasing company (lessor). In some models, the firm may purchase the token at the end of the contract or exchange it for another model. In others, it works like renting a car.

Billions in insurance

The world’s largest charter company is AerCap, which owns thousands of aircraft. It does not fly, it leases its planes only to airlines responsible for operation and maintenance.

Precisely because it is the largest in the industry, it is the company most affected by the risk of not being able to save its plane.

Before the Ukraine crisis, more than 100 planes were leased with Russian airlines.

AerCap was able to save:

• A Boeing 777-330ER (which can cost up to US$100 million) in Tarbes (France)
• another 21 aircraft
• three engines

BOC Aviation recovered:

• A Boeing 747-8F with Russian AirBridgeCargo in Hong Kong

Here is AirInsight’s website where it determined it was leased to S7 Airlines (Siberia):

• five A320ceos
• two A321ceos
• six A321neos
• seven Boeing MAX 8s

With the newcomer iFly Airlines:

• an A330-200
• three A330-330s

And with Moscow-based Nordwind:

• three A321ceos
• two A321neos
• two A330-220s
• five Boeing 737-800s

ALC did not disclose its total fleet leased in Russia or the total value of the contracts, but Airfinance Journal says the company has leased 25 aircraft worth $757 million to the Russians.

AerCap said it has war or conflict insurance and has filed a $3.5 billion claim with the insurer for the planes stranded in Russia, but the process is likely to take years.

The government ordered the nationalization of the planes

The Russian government announced in March that airlines could nationalize all the planes that the leasing companies tried to save, and transferred the registration of planes from countries such as Bermuda or Ireland to Russia.

UTair Airlines said it will stop operating the nine Boeing 737 NGs leased, but the majority of the aircraft fleet owned by Russian leasing companies continues to fly normally on domestic routes, even with the risk of missing parts and services.

The world’s largest aircraft manufacturers (Airbus, Boeing and Embraer) announced the suspension of services to Russian airlines. Although the terms of the boycott were not very clear, it was mentioned that the supply of parts, maintenance and technical support to Russian companies was stopped, as well as the closure of some offices in that country and Ukraine.

According to consulting firm Ishka, there are currently about 500 Boeing and Airbus aircraft flying in the region, with an estimated value of US$10.3 billion (R$52 billion).

As for Embraer, it has 60 aircraft, slightly less than half of which are owned by private top aviation operators and the rest are owned by leasing companies working with airlines.

According to Sillas de Souza Cezar, professor of economics at Faap (Faculdade Armando Álvares Penteado), Todos told a Bordeaux column that the boycott could have a strong impact on Russian aviation, making this segment unsafe in the country: In the best-case scenario, it is better to fly in the most optimistic way. becomes dangerous”.