The sanctions gave leasing companies the right to seize planes leased to Russia by the end of the month.
New Russian Law
However, earlier this week, the President of Russia, Vladimir Putin, signed a new law that allows Russian airlines to reregister aircraft owned by foreign companies which are leased in Russia. This new law makes it much more difficult for leasing companies to repossess their aeroplanes without prior approval from Russia. The Kremlin stated on their website that the new Russian law is:
“aimed at preserving the fleet of foreign aircraft from the operators of the Russian Federation in order to ensure the uninterrupted functioning of activities in the field of civil aviation as part of the adoption of ‘anti-sanction measures”
The new federal law goes by the name of ‘Amendments to the Air Code of the Russian Federation and Certain Legislative Acts of the Russian Federation‘, which has been published on the Kremlin’s website.
How Does Aircraft Leasing Work?
Currently, Russia has over 500 commercial aircraft that have been leased from companies based in foreign countries, with a value believed to be over $10 billion (£7.7bn).
Nearly half of Russia’s leased planes are from Irish-owned companies. Some leasing companies have asked for their aircraft back, and they have until the 28th of March to return them, but it’s unlikely for Russia to return them.
If Russia doesn’t return the aircraft, they will soon run into further problems as aircraft manufacturers such as Airbus and Boeing have suspended the sale of any spare parts to Russian carriers. Furthermore, the lack of sufficient servicing and maintenance will mean the aircraft will lose its value, which means Russia could soon be in even further debt.
Once this is over, do you think companies will still lease aeroplanes to Russia or has their trust been broken? Let us know in the comments below.