Sanctions, countermeasures, growing transport demands and shrinking capacity. Intercontinental supply chains are increasingly derailing, and prices are going through the roof, thanks to Putin’s attack on Ukraine, not to mention the tragedy brought upon the people and the country by his militia.
Were it not so tragic, one could speak of wrong timing. On 24FEB22, Volga-Dnepr Group announced that it had signed a Memorandum of Understanding with the UK-based, non-profit organization,
Humanitarian Logistics Association (HLA), dedicated to helping humanitarian logistics professionals and organizations around the world deliver aid more effectively.
No sooner was the ink dry on the agreement than Russian troops invaded Ukraine.
What has happened since is well recorded: First the UK, followed by the EU, Canada, and the U.S. closed their airspace to Russian commercial and private aircraft. Moscow responded accordingly, imposing sanctions and airspace closures on more than 36 states.
ABC / Volga-Dnepr Group are facing tough times
The main victim of this spiral of sanctions, as far as the Russian side is concerned, is likely to be the Volga-Dnepr Group, specifically its scheduled arm, AirBridgeCargo Airlines. Due to the embargoes, the freight carrier’s business model practiced since 2004, has completely collapsed: the transport of shipments on east-west routes via Moscow Sheremetyevo.
The airline is also expected to lose its entire fleet. This involves a total of 18 leased freighters - 13 B747-8F, 4 B747-400ERF, and one B777F. According to the Financial Times, Western leasing companies are not allowed to sign new leasing contracts with Russian airlines. Existing contracts must be terminated within 30 days, i.e., by 28MAR22.
No fleet, no business
The option of transferring at least some or even all of the freighters to Volga-Dnepr's foreign subsidiaries, CargoLogic Germany, or London-based CargoLogic Air, a thought that came up, seems hopeless. To do so, the ABC management would have to submit maintenance and engineering programs, provide proof of insurance, the technical staff needs rating certificates, ABC would have to disclose full ownership, submit safety and security programs to the authorities, and meet CAMO criteria. The Continuing Airworthiness Management Organization (CAMO) is responsible for checking aircraft maintenance programs and repair intervals, which are then documented in Airworthiness Review Certificates and submitted to the authorities for review and approval.
To meet the CAMO criteria takes considerable time, at least 3 months, probably longer, because of the high requirements for quality demanded by the authorities, an expert told CargoForwarder Global.
Where does Volga-Dnepr park its AN-124s?
The option of re-fleeting aircraft from an airline registered in the West to another Western company is basically possible but faces high hurdles. This move is excluded to aircraft of Eastern production, including the AN-124s and Ilyushins operated by Volga-Dnepr. According to reports, most of Volga-Dnepr's AN-124s are currently parked at airports outside Russia, with two of them standing in Leipzig for technical reasons. How they are to get back to Russia or flown to another country outside the restricted airspace zone, is currently completely open.
In addition to the Volga-Dnepr Group, state-owned Aeroflot (SU) is also heavily affected by the boycott. It operates 200-plus aircraft (2021 statistics), mainly Airbus and Boeing variants, but also the Superjet 100 from manufacturer Sukhoi.
Not only does SU, like ABC, completely lose important markets such as the EU, but the carrier is also excluded from sourcing spare part supplies stemming from Western producers.
Cargo will seek new avenues
The flight bans have adverse effects on those European airports that are heavily frequented by Russian carriers, too. In the case of ABC/Volga-Dnepr, particularly Liege and Frankfurt. Cargo Chief, Max Conrady from Rhine-Main-Airport, speaks of an average of 20 freighters per week operated just by ABC. Consequently, FRA loses between 1,400 and 1,500 euros in landing fees per flight. Added to this are parking fees or payments to oil companies for refueling the freighters. Above all, however, the tonnage flown in and out of the 2 European hubs by Volga-Dnepr/ABC-operated freighters will drop considerably.
According to manager Conrady, last year, ABC accounted for around 110,000 tons handled at FRA. A throughput now lost for ground handling agent, Frankfurt Cargo Services (FCS). Nevertheless, Mr. Conrady is optimistic: “The demand for air transport is there. Air freight will seek new ways.”
Meanwhile, the EU is preparing further sanctions for maritime transport. The list will include 19 ships that sail under the Russian flag, which will no longer be allowed to call at any EU port.
We welcome and publish comments from all authenticated users.