March 2 – Russian aviation diverted to isolation on Wednesday as Boeing (BA.N) and Airbus (AIR.PA) cut off component supplies and analysts predicted carriers could disassemble parked aircraft into parts or be tempted to explore alternative sources to keep flying.
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Boeing said it had “suspended major operations” in Russia, where it also has research and engineering centers.
Airbus said it was suspending supplies of parts and services to Russian airlines, but was also analyzing whether their Moscow engineering center could continue to provide services to local customers. It is not specified what kind of work this may involve.
The bans come just as the major powers are discussing renewing an agreement that removes similar sanctions against Iran until Washington withdraws in 2018.
Sanctions against Russia, which calls its actions in Ukraine a “special operation”, will have bigger consequences than those for Iran or North Korea, given the size of its market.
“As Western lessors also want to reclaim aircraft operated by Russian carriers, the Russian aviation sector is now on a step similar to North Korea and Iran – and similar to that under Soviet rule,” said Vertical Research Partners analyst Rob Stalard.
Russia accounts for 6% of airline capacity in 2021, according to IBA consultants.
Its airlines have a total of 332 Boeing planes and 304 Airbus planes, or about two-thirds of Russia’s fleet, according to Cirium Fleets.
How quickly they run out of parts will depend on how many critical items the airlines have.
Jetliners are subject to constant supervision, ranging from daily inspections to heavy maintenance every six years.
Although routine problems may not require immediate repair, provided the problem is resolved after a certain number of days, some parts remain essential for the aircraft take-off.
Planes owned by Russian airlines can fly in the domestic market as long as they have enough parts in stock, but carriers may have trouble servicing planes in dwindling areas of the world that still accept Russian planes, maintenance experts said.
Even when parts can be found outside the country, airlines face potential payment difficulties after some Russian banks were banned by the international payment system SWIFT.
CANNIBALIZATION
Unlike Iran’s decaying planes, inherited from decades of US sanctions, Russia has an advanced navy.
“He will have to create a complete system for maintaining certain types of aircraft. But before that … it will have to use some planes for use as spare parts, “said Oleg Panteleev, head of Russia’s analytical agency AviaPort.
“Cannibalization will be possible because the need for airplanes will fall,” Panteleev said.
Many airlines reuse parts of their own aircraft, but there have been complaints in the past that troubled airlines elsewhere have taken parts of leased aircraft that are banned.
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About 515 planes in Russia are leased by foreign companies, according to Cirium. So far, there is no suspicion that Russian airlines have removed parts of leased aircraft without approval.
ALTERNATIVE DELIVERIES
Depending on the duration of the crisis, some experts predict that airlines may be looking for alternatives. Chinese parts are already being used in some markets for older aircraft that do not serve the West, while Iran has been perfecting an under-the-table supply system for decades.
“Of course, it would be good for Russia to find suppliers and partners in third countries who are ready to ensure stable supplies of all necessary components,” Panteleev said.
“But if these countries say they fear sanctions, Russia will have to look for foreign specialists and set up a support system in Russian factories.”
However, the use of informal units would put valuable aircraft in a gray area and make it more difficult to finance them after the end of the war. This is something that industry experts say Russian international carriers, with a young medium-sized fleet, would struggle to avoid.
Maintenance agreements are also at risk.
Last year, Aeroflot signed a long-term agreement with Hong Kong Aircraft Engineering Company (HAECO), which did not respond to a request for comment.
Lufthansa Technik (LHAG.DE) said it had stopped serving Russian customers, including hundreds of aircraft.
Difficulties with Russia in supplying spare parts can affect international airlines, which still fly to Russia and sometimes require spare parts at their destination.
Russian airlines will also be banned from accepting new Western aircraft. They have 62 custom aircraft with Airbus or Boeing.
Meanwhile, Russia’s Sukhoi aims to supply its local regional Superjet with Russian engines by 2024.
Report by Jamie Fried in Sydney, David Shepardson in Washington, Tim Heffer in Paris and Reuters in Moscow Additional reports by Alexander Cornwell in Dubai and Ilona Wissenbach in Berlin Written by Jamie Fried, Tim Heffer, edited by Lincoln Fest
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