Hard times for the Russian aviation

The sanctions imposed by the West in response to the Russian military operation in Ukraine have significantly impacted the Russian aviation industry, forcing it to shift its focus primarily to the domestic market. The industry's resilience was achieved through its prolonged and deep integration into the international aviation market, as well as substantial financial injections form the government, aviation expert Anastasia Dagaeva writes.

 

The Western sanctions, following the outbreak of hostilities in Ukraine, dealt a significant blow to the closely integrated Russian aviation industry, writes Dagaeva for Carnegie Politika. As a result, 37 countries closed their airspace to Russian aircraft, including the entire EU, the UK, the US, Canada, and others. In addition, Russian airlines lost leasing and maintenance of foreign aircraft, which made up the majority of the Russian aviation fleet, as well as access to foreign software, insurance instruments, and so on.

The largest losses were suffered by «Aeroflot,» whose main source of revenue was international flights, notes the expert. As a result, by the end of 2022, the share of premium and high-income international routes, where the company sought to focus, did not exceed 10% for most of the year. In addition, the company lost royalties of $500 to $800 million annually, which it received for foreign carriers' use of the Trans-Siberian route to fly from Europe to Asia.

In this situation, the only way out was to increase domestic transportation, which, however, is complicated by the fact that 11 airports in the country's south have remained closed since February 24 of last year.

The loss of virtually all commercial sources of revenue by airlines has made them highly dependent on the state. In 2022, subsidies amounted to 100 billion rubles, with plans to halve them by 2023.

«The subsidies are so extensive that they equalize the profitability of international and domestic routes. It turns out that carriers only need to fly within the country; the main thing is not to deviate from the budget», writes Dagaeva.

In addition, the situation for Russian airlines has been somewhat simplified by laws passed by the government, including the legalization of aircraft cannibalization and parallel imports. The former allows airlines to remove parts from one aircraft and install them on another, and the latter ensures the supply of spare parts to Russia.

The expert explains the resilience of the Russian aviation industry by another important factor — the prolonged integration of Russia into the global aviation market. Thanks to years of collaboration with Western partners, domestic carriers have accumulated significant experience, skills, procedures, technologies, and standards, establishing them as the benchmark.

«Aircraft maintenance, personnel recruitment, documentation, radio communication, and much more — everything is described and standardized. All of this works for the most critical aspect of civil aviation — safety. And all of this is embedded in the DNA of modern carriers, including Russian ones», notes Dagaeva.

Given the good reserves, including a new fleet, staff, and technical centers, such a situation may last for quite some time. The Russian aviation industry hopes that deliveries of domestically produced aircraft will begin by 2030. It is difficult to judge the feasibility of these plans, given the risks of sanctions.

The results of the sanctions, including not only difficulties with spare parts and aircraft maintenance but also the cessation of experience sharing and full-scale industry communication, will inevitably affect the quality of Russian aviation, according to the expert.

«In the future, Russian aviation will not disappear, but it will increasingly become a thing in itself. It will not be possible to avoid difficult times», she concludes.

Source — Carnegie Politika

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