As the impact of sanctions in the aftermath of Russia's invasion of Ukraine ripples across the international airline sector, Boeing (BA.N) announced it was halting parts, maintenance, and technical assistance for Russian airlines.
The news came late Tuesday, as aircraft and engine makers, lessors, and maintenance, repair, and overhaul (MRO) providers with Russian customers face a slew of EU and US restrictions, including restrictions on leasing planes, exporting new planes, and providing components.
There may also be payment delays as a result of the suspension of several Russian banks from the SWIFT international payments system.
The latest new sanctions against it has isolated the aviation industry of Russia in the same manner that sanctions had isolated Iran and North Korea. However these sections will have far more serious implications due to the largest size of the Russian market and previous strong reliance on Western supplies.
According to aviation consulting firm IBA, Russia accounted for roughly 6 per cent of global air traffic capacity in 2021, up from around 4 per cent in 2019 owing to the relatively strong performance of its domestic market during the pandemic.
Last year, domestic flight capacity in Russia was higher than pre-pandemic levels, and Russian airlines were considered as more dependable performers on jet leasing agreements at a time when several Southeast Asian airlines were delaying payments or returning jets owing to financial difficulties.
According to Cirium, over 515 Russian planes with a market worth of almost $10 billion are hired from international companies.
Under EU sanctions, lessors have until March 28 to end contracts, but industry officials are concerned that Russian airlines would comply with instructions to return the planes. find out more
The embargo on spare parts delivery, according to Peter Walter, director of technical and asset management at IBA, is anticipated to have a significant impact on the Russian sector, as it has in the past in Iran.
"Because parts are limited we will expect to see aircraft that are on the ground in Russia being robbed in order to keep the remainder of the fleet operational," he said on a webinar on Tuesday.
Although Russia has local MRO facilities, airlines have also entered into agreements with international companies. Aeroflot inked a long-term component repair and overhaul deal with Hong Kong Aircraft Engineering Company (HAECO) last year.
On Wednesday, HAECO did not immediately reply to a request for comment on whether the fines would damage the deal.
In a blow to Airbus and Boeing, Russian airlines would also be prevented from ordering new aircraft from Western manufacturers.
According to IBA statistics, Russian airlines have placed orders for 62 planes from the two manufacturers, including 25 Boeing 737 MAX aeroplanes that were scheduled to be delivered to Utair this year.
The 737 MAX has been grounded for over three years because to two catastrophic disasters, and Russia is the only major country that has refused to allow it to return to operation.
(Source:www.usnews.com)
The news came late Tuesday, as aircraft and engine makers, lessors, and maintenance, repair, and overhaul (MRO) providers with Russian customers face a slew of EU and US restrictions, including restrictions on leasing planes, exporting new planes, and providing components.
There may also be payment delays as a result of the suspension of several Russian banks from the SWIFT international payments system.
The latest new sanctions against it has isolated the aviation industry of Russia in the same manner that sanctions had isolated Iran and North Korea. However these sections will have far more serious implications due to the largest size of the Russian market and previous strong reliance on Western supplies.
According to aviation consulting firm IBA, Russia accounted for roughly 6 per cent of global air traffic capacity in 2021, up from around 4 per cent in 2019 owing to the relatively strong performance of its domestic market during the pandemic.
Last year, domestic flight capacity in Russia was higher than pre-pandemic levels, and Russian airlines were considered as more dependable performers on jet leasing agreements at a time when several Southeast Asian airlines were delaying payments or returning jets owing to financial difficulties.
According to Cirium, over 515 Russian planes with a market worth of almost $10 billion are hired from international companies.
Under EU sanctions, lessors have until March 28 to end contracts, but industry officials are concerned that Russian airlines would comply with instructions to return the planes. find out more
The embargo on spare parts delivery, according to Peter Walter, director of technical and asset management at IBA, is anticipated to have a significant impact on the Russian sector, as it has in the past in Iran.
"Because parts are limited we will expect to see aircraft that are on the ground in Russia being robbed in order to keep the remainder of the fleet operational," he said on a webinar on Tuesday.
Although Russia has local MRO facilities, airlines have also entered into agreements with international companies. Aeroflot inked a long-term component repair and overhaul deal with Hong Kong Aircraft Engineering Company (HAECO) last year.
On Wednesday, HAECO did not immediately reply to a request for comment on whether the fines would damage the deal.
In a blow to Airbus and Boeing, Russian airlines would also be prevented from ordering new aircraft from Western manufacturers.
According to IBA statistics, Russian airlines have placed orders for 62 planes from the two manufacturers, including 25 Boeing 737 MAX aeroplanes that were scheduled to be delivered to Utair this year.
The 737 MAX has been grounded for over three years because to two catastrophic disasters, and Russia is the only major country that has refused to allow it to return to operation.
(Source:www.usnews.com)
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