How deep will sanctions hurt the Russian aviation industry?

Sanctions imposed on Russia by the US and its allies in Europe and restricting access to its airplanes will hurt the Russian aviation industry and affect its counterparts in both Europe and the US.

The EU sanctions package includes three significant restrictions. The first one stops the sale of aircraft and leasing of components to Russian operators. The second and third restrictions involve halting maintenance and limiting the sphere of insurance.

"Formally, if an airline loses its insurance, it will not be able to take its planes into the air, which means that once the sanctions come into force, transportation will be paralyzed," Oleg Panteleev, executive director of the information-analytical agency AviaPort, tells TRT Russian.

Why has the European Union chosen these particular measures? 

"We ban the sale of all aircraft, parts, and equipment to Russian airlines. 

This will lead to the degradation of a key sector of the Russian economy and the country's connectivity," European Commission head Ursula von der Leyen said on February 25.

Industry analysts also argue that prohibiting the sale of all aircraft, spare parts, and equipment to Russian airlines would have a long-lasting effect on the Russian economy, which heavily relies on the aviation sector.

At least three-quarters of Russia's current commercial air fleet has been built in the EU, the US, and Canada.

For a vast country like Russia, regular flights are a matter of preserving territorial connectivity and, when it comes to communication with some remote and inaccessible regions, the survival of people in hundreds of settlements is at stake. 

Therefore, preserving civil aviation capacity will be a significant task for the Russian government in the following weeks and months. 

Oleg Panteleev says that the Russian government's primary goal will be to meet the needs of civil aviation for flights on domestic routes and a limited number of international destinations.

Flights to North America, EU countries, as well as offshore exotic resorts are important for individual airlines, but not too critical for the government. 

"Consequently, statements of heads of governments of Poland, Czech Republic and other countries about closing their airspace for our airlines won't influence the industry - in new realities the European market becomes a third-priority for us," considers Panteleev. 

Many Russia watchers have expressed concerns that Russians will struggle to get to Europe even after using foreign airlines of third countries. 

But there are still workarounds, confirms Roman Gusarov, editor in chief of the aviation portal Avia.ru.

For example, he said that Turkey and Kazakhstan would become two major hubs that Russian travelers will use to fly elsewhere.

Experts argue that shrinking Russia’s air traffic to non-European countries would end up hurting European carriers too. 

“Now if the Trans-Siberian and other routes through Russia are closed, it will be much more expensive for them to serve the Asian direction, which would reduce their competitiveness against Asian rivals,” American business magazine Forbes reported.

The stakes are high

According to Igor Naumov, journalist and aviation expert at Profil, both Airbus and Boeing are equally vulnerable in light of the deteriorating political climate between Russia and European states. 

Russian imports cover about 90 percent of Boeing's needs in titanium, and Airbus imports 60 percent of the metal from Russia. "Consequently, Moscow's embargo on supplies of this metal would have a great impact on the US and EU aircraft industry," Naumov notes.

The European ban on the supply of planes and spare parts has already begun to affect Airbus, one of the largest aircraft manufacturers in the world. 

According to Russia’s Federal Air Transport Agency, more than 300 Airbus planes are in Russia. Aeroflot has the most planes (118 of them are used on the scheduled passenger services), and Ural Airlines has the entire Airbus fleet. 

According to aviation expert Roman Gusarov, about 90 percent of Russian companies have aircraft that belong to leasing companies from the US and Europe.

There is no alternative

Experts admit that the problem will remain until Russia can establish the local production of MS-21 and SSJ-NEW. So far, the only locally manufactured civil aircraft is Superjet 100, a Soviet-era machine with a maximum flight range of 4.3 thousand kilometers. At present, its production volume is insufficient, although the government had previously announced that 23 Superjets would be produced in 2021 and 18 in 2022. 

The production of Superjet and MS-21 slowed down after the U. Department of Commerce imposed sanctions against the manufacturers. Both the aircraft's heavily relied on the components imported from the US and Europe. 

"As for the Superjet aircraft, the creation of its import-substituted version is now in full swing. Deliveries of such aircraft will be possible from 2024, around the same time a domestic turbojet engine PD-8 should appear," Panteleev said.