Despite crippling sanctions against the Russian Federation, Aeroflot Russian Airlines just purchased eight Airbus A330-300 jets. How was this even possible? The answer is an exception which seeks to avoid an even greater harm.
Aeroflot Just Purchased Eight A330-300 Jets
Aircraft lessors were caught in a terrible position when Russia invaded Ukraine, leaving over 400 leased jets in a state of limbo as sanctions compelled Russian airliners to return leased jets and the airlines responded by keeping them. Moscow even went so far as to bless the theft of these aircraft by allowing them to be re-registered within Russia, a bid meant to ensure each aircraft kept its airworthiness certificates.
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Without adequate maintenance records, these aircraft will become lemons even if they are returned after the war is over and sanctions against Russian airlines are dropped. That leaves aircraft lessors with two options: hope that the airlines holding their aircraft will eventually pay up or start an insurance claim, which could be litigated for years (for the latter, an recently-open claim by Dublin-based AerCap for 100 aircraft has exceeded $3.5 billion).
In a surprising move, Aeroflot purchased eight Airbus A300-300 jets “as part of the fulfillment of contractual obligations.”
But wait. Don’t the sanctions against Russia prohibit the acquisition of heavy equipment like commercial airliners? While true for new aircraft purchases, an exception in the European Union sanctions against Russia allows Russian airlines to purchase leased aircraft when the lease ends. The exception seeks to shield aircraft lessors from even greater harm by incentivizing Russian airlines to pay off their lease obligations and maintain airworthiness certificates for their aircraft (the transaction must be “strictly necessary to ensure lease re-payments”).
It is not clear which aircraft leasing company was the beneficiary of this deal, but Aeroflot has 12 A330-300 jets which it leases from Vistavia and Aviasky, both Irish companies.
Aeroflot just purchased eight A330 jets from an Irish aircraft leasing company, a move that is permitted under a narrow exception to the European Union sanctions against Russia. The deal represents the tenuous position not just for aircraft lessors, but for Russian airlines which seek to balance crippling sanctions and flights bans with contractual obligations.
image: Fedor Leukhin