Russian airlines have 980 passenger aircraft in operation, of which 777 are leased. In addition, there is AirBridgeCargo's large fleet of B747 freighters and its single B777F, all owned by Western capacity providers as well. As part of the sanctions imposed on the Putin regime following its war on Ukraine, the EU has set a 28MAR22 deadline for leasing companies to end current contracts with Russian carriers. Should S7, Aeroflot, Pobeda, ABC and the others stick to this date, air traffic in the country will come to a virtual standstill. In the meantime, the Russian state-owned railway company RZD is also hit by the sanctions, albeit indirectly. It was forced to implement a stiff cost-cutting program.
Quo vadis, Russian transport industry? Presumably, the managers in the executive suites of Russian airlines and the state-owned railroad company, RZD, do not have a precise answer to this question. The only credible one, is probably that the longer Putin's campaign against Ukraine continues, and the more the sanctions imposed by the EU and other parties are tightened, the sooner Russian airlines will be on the brink of extinction. This is because Aeroflot and Co. are highly dependent on spare parts deliveries. Yet, Boeing and Airbus have been prohibited from doing so.
Russian carriers are fighting for survival
In addition, Russian airlines have also been cut off from the insurance and reinsurance markets in the European Union and the UK. Germany's Lufthansa Technik said it had stopped serving Russian customers, involving hundreds of planes.
TASS news agency reported that the Russian transport ministry has drawn up a bill to help airlines until September 2022. This allows maintenance carried out by third-party service providers and suspends all inspections of aircraft operated by Russian companies. These measures violate international safety requirements.
Some aviation executives are concerned that the sanctions prevent plane makers from sharing service bulletins and airworthiness directives that are key for complying with international safety and security regulations. Deprived of spare parts, Russian airlines will need to strip parts from their existing fleet to replace defunct instruments or components in order to maintain the airworthiness of some of their aircraft.
Currently, Russian airlines have 62 jetliners on order with Airbus and Boeing. Those deliveries are barred as well.
In response to the sanctions, Moscow relies on import substitution, primarily increasing the production rate of the Sukhoi-produced Superjet-100 to up to 40 units per year. This includes the fast development of the Russian-made turbine PD-8 that should be certified within the next 12 to 14 months, the Ministry of Industry and Trade announced.
RZD under pressure
Meanwhile, the state railroad company, RZD, has also ordered a tough cost-cutting program. Everything that is not directly related to transports has been postponed or completely removed from the list. This affects measures such as consulting, research, legal advice, and similar activities.
The order announced on 01MAR22, comes from Oleg Belozerov, Chairman of the Board of RZD, writes the newspaper Vedomosti. The document emphasizes that it is paramount to reduce spending “in order to maintain liquidity and find new sources of financing the company's activities.” Job cuts are not planned for now, rail management says.
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