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Sanctions May Ground Russia's Major Airlines

Published: August 7, 2014 (Issue # 1823)



  • Dobrolyot had been flying a month before EU sanctions sunk its leasing agreement with an Irish company.
    Photo: Dobrolot.com

The grounding this week of Russia's low-cost airline, Dobrolyot, by European Union sanctions has exposed the vulnerability of Russia's airline industry, which relies on aircraft leased from abroad that can be withdrawn at the push of a pen in Brussels or Washington.

Russian airlines lease 90 percent of their planes from international leasers, meaning any carrier to be blacklisted could lose most of its fleet overnight. Removing that dependence would take time, cost money and likely see Western leasing companies lose out to Asian competitors, industry experts said. As a result, air travel in Russia already notoriously expensive could become even less affordable.

"Because of their better fuel economy, most aircraft in the fleets of Russian airlines are Western-made and these planes are leased by American and European leasing companies," said Andrei Rozhkov, a transport analyst at investment company Metropol. "Technically speaking, all these airlines could be targeted with the same sanctions [as Dobrolyot]," he said.

Dobrolyot, a subsidiary of Aeroflot that began flying in June, was blacklisted by the EU last week for flying to Crimea, the annexation of which by Russia in March sparked outrage in the West.

On Sunday, the company suspended all flights after its leasing contract with Ireland's AWAS for its Boeing-737-800 aircraft was annulled. Lufthansa Technik, the German company that serviced Dobrolyot's planes, also refused to deal with the company.

Dobrolyot said Wednesday it had placed a deposit to buy 16 Boeing 737-800 planes directly from the plane maker, which is not subject to EU sanctions, Interfax reported. The first planes are scheduled to arrive in 2017.

Most of Russia's major airlines fly to Crimea. Aeroflot, S7 Airlines, Uralskiye Avialinii and Red Wings offer regular flights.

Only Red Wings is insulated, as it flies Russian-made Tu-204-100 planes. All other airlines operate either Boeing or Airbus planes acquired through operational leasing.

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ALL ABOUT TOWN

Wednesday, Sept. 24


AmChams Human Resources Committee meets this morning to discuss Labor Market Trends in their office in the New St. Isaac Office Center on Ulitsa Yakubovicha. The meeting begins at 9 a.m.



Thursday, Sept. 25


Learn more about tax controls on prices at AmChams Taxation Committee Round Table Meeting this morning at 9 a.m. Vladimir I Golishevsky, Acting Head of the Transfer Pricing Department of the Federal Tax Service of Russia, will be in attendance to discuss amendments to the Russian Tax Code. Register in advance if you wish to attend by emailing all@spb.amcham.ru.


Today is the last day to check out Inventing Everyday Life. Part III: Street exhibition one of Manifestas parallel programs on at 36 Morisa Toreza Prospekt until 8 p.m.



Friday, Sept. 26


Feel yourself Spanish for a little bit at Spain Day, a celebration of all things Iberian this evening at the Derzhavin Mansion in the city center. Speak Spanish during the open classes, practice your footwork on the dance floor to the sounds of flamenco music or chow down on paella while learning more about the countrys culture.



Saturday, Sept. 27


Local KHL team SKA St. Petersburg welcomes Vityaz from the Moscow region this afternoon at 5 p.m. in a Western Conference showdown. Tickets are still available to the match and can be purchased on the teams website, at the arena or in their merchandise shop on Nevsky Prospekt.


Let Biblioteka restaurant on Nevsky Prospekt teach your children how to be proper gentlemen and ladies during Etiquette for Children, a class for children five to 11 years of age that promises to help them become the cream of society. The class starts at 5 p.m. and costs 600 rubles ($15.60). Call 322 2526 to reserve a spot for your child.



Sunday, Sept. 28


For something different, head to the African Pride Event being held by Nicks Walkabout Tours, who have also helped bring African tribal leaders for the celebration. Check Vkontakte for more information.



Monday, Sept. 29


Experience Baltic culture through the medium of drama during the Baltic House Theater Festival, which starts on Sept. 25 and continues through Oct. 13. Not only are some of the regions most famous dramatic works planned for production but the event acts as a creative laboratory for a future generation of dramatists. Check the events website for more details about the festival.



Tuesday, Sept. 30


Local neo-pagans invite all worshipers to the dedication of a new Heart Tree in Sosnovka Park, Gods Wood. 4 p.m.


The second MIFIC Expo begins today at Lenexpo, providing an interactive platform for industry experts and manufacturers. Accessories, surfaces and interior decoration materials are just some of the things that will be available for perusal at the expo, which runs through Oct. 2.



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