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Russia and Ukraine conflict: Putin's controversial law not to return more than 500 commercial aircraft to the West - Fintech Morning

Russia and Ukraine conflict: Putin’s controversial law not to return more than 500 commercial aircraft to the West

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Russia fights back against Western sanctions.

President Vladimir Putin signed a law on Tuesday to prevent foreign companies that leased their aircraft from Russia from taking them back.

The decision comes after several companies asked Moscow to return the planes they rented, as part of the sanctions imposed by the West after the Russian invasion of Ukraine.

And it is that around 75% of the aircraft used by Russian airlines are leased , according to official data, for a total of 515 aircraft valued at more than US $ 10,000 million.

The return of this fleet would leave Russia’s airspace virtually empty.

To prevent this, the new law allows foreign jets to be registered in Russia, in order to “ensure the uninterrupted operation of activities in the field of civil aviation.”

The Kremlin’s move came after Bermuda and Ireland, where nearly all foreign-leased planes operating in Russia are registered, said they would suspend airworthiness certificates for those planes.

Russia now seeks to circumvent that measure by keeping registration and security certification within the country’s borders in order to continue using the foreign planes, although it could only do so to fly domestic routes or to some of its allied countries.

 

closed airspace

Since the invasion of Ukraine on February 24, Western companies have been terminating leases and asking for the return of their planes.

Most international air routes out of Russia are at a standstill, after a large number of countries, including the US and members of the European Union, closed their airspace to Russian planes.

The measure signed by Putin has now led to deep questioning among international civil aviation experts, but has also raised doubts among the country’s own airlines.

planes

“We hope that registration of these planes in Russia will be avoided; we want to return them to the leasing companies,” a source at one of the airlines told Reuters .

“[If it registers in Russia] the airline would become an accomplice. The law provides a way to register in Russia, but it does not oblige the airline to do so… It is the first step for hijacking the planes,” he added. .

The Russian government has insisted it needs to apply “special measures” in the face of Western sanctions that Putin has described as “akin to a declaration of war.”

In yet another response to the West, the Kremlin announced Tuesday that it would impose sanctions against several US government officials, including President Joe Biden and Secretary of State Anthony Blinken.

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As part of that measure, Moscow banned them from entering the country.

 

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A law with serious implications

Analysis by Theo Legget, BBC Business Correspondent

Hundreds of foreign-owned planes remain in Russia. To comply with the penalties, the leasing companies are trying to get them back. But that seems highly unlikely.

If Russia holds on to these planes, which together are worth billions of dollars, they will still be able to fly, at least in Russia and in a handful of former Soviet republics.

But it is one thing to steal planes and quite another to keep them running for an extended period of time .

Airbus and Boeing cannot supply them with spare parts, so when something needs to be replaced, it will have to be taken from another aircraft or made by a third party.

That has serious security implications.

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It will also make it virtually impossible to secure those planes outside of Russia.

Servicing is also a concern, with many aircraft being moved off-site for maintenance.

And when the crisis ends, Russia will have to pay a huge bill.

If planes are not properly maintained, their value will plummet. So even if the landlords take them back, they will demand compensation.

Aviation is an international business and you have to respect the rules.

Russia might decide to mock the rest of the world now. But one day he will want to rejoin the club, and the conditions then could be very tough.

Link: https://www.bbc.com/mundo/noticias-internacional-60757163

Author:

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  • BBC News World
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Edinson Love
https://fintechmorning.com

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