Russia’s $12 Billion Lifeline to Aviation Amid Western Sanctions

Since the imposition of Western sanctions following Russia's incursion into Ukraine, which resulted in a halt in the supply of essential parts and maintenance services, Russia has distributed over $12 billion in state loans and subsidies to sustain its aviation industry, according to a Reuters study. With a reliance on foreign aircraft, Russia is confronted with the formidable challenge of independently advancing its aviation sector using domestically produced components, while also purchasing aircraft from foreign lessors to prevent further seizures of its fleet. 


In March 2022, Western aircraft manufacturers Airbus and Boeing ceased providing services and spare parts, and discontinued regular maintenance support for Aeroflot, Russia's flag carrier, and other Russian airlines. Since then, Russia has invested 1.09 trillion roubles ($12.07 billion) in the civil aviation industry, including aircraft production and airline financial aid, according to Reuters' calculations based on data from the Ministry of Finance and the Accounts Chamber, which supervises budget execution. This expenditure is nearly double the 547 billion roubles paid in 2020-21 when the COVID-19 pandemic led to a severe decrease in air travel, and it underscores the Kremlin's efforts to gain control of a vital industry. "Our aircraft fleet is heavily burdened with foreign-made planes," President Vladimir Putin stated last week. "We aim to manufacture over 1,000 of our own aircraft by 2030. Work is required."


As per ch-aviation, a Swiss aviation intelligence provider, Russian airlines currently operate 991 aircraft, 405 of which are made in Russia. However, only 133 are Superjets manufactured by the state-owned United Aircraft Corporation. Other Russian-made aircraft, such as Tupolev, Yakovlev, and Ilyushin, are seldom used for commercial flights.  The Industry and Trade Ministry responded to Reuters' findings by stating that support for aircraft manufacturing, a critical industry, will continue for many years. "The primary focus is on supporting sales, increasing production capacity, and establishing a post-sales service system," the ministry stated. 


A dependable air industry is particularly important for Russia, both for transporting people and goods across its vast territory and to reinforce Moscow's claim that the sanctions have had minimal impact. With elections approaching in three months, the failure of an airline could put reputational and electoral pressure on Putin, who is seeking re-election.  Despite being a significant aviation power since the Soviet era, Russia's technical competence is unquestionable. Western aviation analysts believe that the investments will, at best, keep the fleet operational, but they doubt that its aircraft will re-enter Western markets in the near future, even if the conflict in Ukraine is resolved. This is due to the cost and bureaucracy associated with rebuilding a fleet with a verifiable safety record and approved parts.

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