Claiming Them for Their Own

Imagine you rented a car, drove it a bit, then got ticked off at the rental car company for whatever reason and refused to return or pay for it. What do you think would happen to you? I’m pretty sure it would involve police and a tow truck.

According to The Washington Post, this is what Putin is doing in Russia but on a much larger scale. His country refuses to return 400 passenger jets that they have leased from foreign companies, which are worth billions of dollars. In mid-March, Moscow passed a law allowing their airlines to put leased aircraft from foreign nations on Russia’s aircraft register. As a result, the Russians have ceased paying for them. That’s significant because almost half of all Russian commercial aircraft are leased from other nations.

In early March of 2022, according to Russian state news agency TASS, as The Wall Street Journal reported, Putin signed the law allowing the nation to keep foreign aircraft for use on domestic flights only. Perhaps he thought they might be re-seized by their rightful owners if they were flown out of his country.

As of this writing, Russian airlines are refusing to return the aircraft along with (literal) tons of aircraft parts they leased from Western companies to their rightful owners. Instead, the rightful owners are being forced to file insurance claims for the withheld equipment to the tune of about $10 billion. That’s right, someone will pay for what they took, and it will not be the Russian government.

Risto Maeots is Estonia’s chief executive officer of an aviation servicing company. His business has been unable to recover several engines from Russia. He commented to The Washington Post,

“Sanctions may be serving the long-term purpose of isolating Russia, but in the short term, they weren’t as painful as they were meant to be. For all the attention given to the seizure of yachts belonging to Russia’s oligarchs, what happens with the aircraft is of far greater import.” 

Maeots continued, “What will the West do with the yachts — go fishing? Russians can do much more with the jets. So short term, they got a fairly good deal.” I’d agree that getting $10 billion in aircraft and high-tech parts isn’t a bad deal. It’s theft on a colossal scale, but not a bad deal if that kind of thing doesn’t bother you.

Giving Credit Where Credit Is Due

It seems that sometime last Spring, the Kremlin had a brief change of heart. According to Airways Magazine, a couple of dozen seized aircraft were unexpectedly returned to their owners. Reuters reported that they obtained documents from  Rosaviatsia (The Russian Federal Agency for Air Transport) explaining how the aircraft returned were all involved in charter flights and were physically kept outside Russia.

To quote the Rosaviastsia document (dated March 9th of this year), “Jets of some operators… with foreign registration are currently located at foreign airfields, including in Turkey, to transfer them to the lessors on the pretext of maintenance.” Well, maybe we shouldn’t give them too much credit, they did give the planes back, but they lied about why.

When asked about Russia’s refusal to turn over the aircraft, a spokeswoman from the Russian embassy in Washington DC took the opportunity to complain about sanctions, “International civil aviation has turned into a tool of political and economic pressure. This is nothing but a blatant abuse of international air law,” adding that the sanctions would “adversely affect flight safety.”

Russia relies on Boeing and Airbus jets manufactured and owned by foreign leasing companies. Specific sanctions against the Russian government were designed to address this issue. However, we were well aware of the fact that Russia did not own most of its commercial aircraft. According to Rob Morris, global head of consultancy at Cirium, and as relayed to WaPo, of the 968 planes in Russia’s commercial fleet, 515 belonged to non-Russian companies.

Home Grown

The Sukhoi Superjet (a commuter plane) and the much larger Irkut MC-21 are built in Russia but extensively use parts and avionics produced elsewhere. They don’t even make their own engines. A Russian company has a powerplant for the MC-21 in development, but it won’t be ready to fly anytime soon.

With its MiG and Sukhoi fighters, Russia fields some formidable military aircraft. Maybe one day, they will make use of that experience and expertise to rebuild their commercial fleet.