‘A Big Drop in Traffic’: Sanctions Are Already Impacting Russia’s Private Jet World

Private jets flying out of Russia have already registered a 25 percent decrease in the number of departures, just days after the European Union and the UK closed their airspace to Russian-owned private aircraft. “We’ve already seen a big drop in traffic in just three days,” Richard Koe of WingX, which tracks business-aviation flights around the world, told Robb Report.

The Berlin-based firm says that before the invasion, business-aviation traffic from Russia, Belarus and Ukraine—the three countries involved in the war—was up 35 percent to 5,421 flights since January 1, compared to the same pre-pandemic time period three years ago. “Russian-registered jets also had a robust 2021, up by 80 percent compared to 2019,” said Koe.

Business-jet activity to and from Russia comprises only about 7 percent of total annual flights in Europe, according to WingX. But even at that small percentage, it’s clear that Russians love big aircraft. Almost 25 percent of private jets flying in and out of Russia are the world’s largest business jets—converted commercial airliners from Boeing and Airbus—which often cost over $50 million. Russians reportedly own from 300 to 500 business jets, many of which are registered outside the country in tax havens like the Cayman Islands, Isle of Man or Bermuda. Most of the aircraft are operated out of countries like Austria, Switzerland and Malta.

The world’s largest business aircraft accounted for 25 percent of the private flights in and out of Russia. 

Courtesy BBJ

“Let me be very clear,” wrote Ursula von der Leyen, president of the European Commission, in issuing its no-fly-zone directive. “Our airspace will be closed to every Russian plane—and that includes the private jets of oligarchs.”

The EU directive has caused some confusion in the business-jet world, according to Alasdair Whyte, CEO of Corporate Business Jet Investor, since it mentioned not only Russian-owned and Russian-controlled aircraft, but any charter aircraft with a Russian national involved. “The trouble is that people need answers now, but things are changing so fast,” Whyte told Robb Report. “Now is not the time to make hasty decisions. The penalties are severe for people that break sanctions.”

With sanctions now looming, some believe that Russia could be the next big market for used business jets. Whyte wrote in an email to his subscribers that “we could soon see repossessions” of aircraft owned by Russians who have been sanctioned and may not pay off their loans; conversely, owners banned from traveling may decide to sell. “These sanctions could be a good thing for the very hot aircraft market,” wrote Whyte. “Manufacturers can easily move customers around and buyers are desperate for large pre-owned aircraft.”

Russian Sanctions Have Impacted the Business Jet World in Europe

Russia has also retaliated against Europe’s flight restrictions by closing off its airspace to commercial and private aircraft from 36 countries. 

Courtesy Sukhoi Design Bureau

“We may be about to see a lot of complicated aircraft coming up for sale,” added Alireza Ittihadieh, president & CEO at Freestream Aircraft. “Russia could become the next source of aircraft after China.”

In a side note, a Texas lawmaker yesterday introduced a measure in the US Congress that would allow US citizens to seize jets and yachts of sanctioned Russians. Rep. Lance Gooden (R-Texas) said citizens could use letters of marque and reprisal—a license that allows US citizens to engage in reprisals against citizens or vessels of another country. The power to grant letters of marque are given to Congress, according to Article 1 of the US Constitution.

In Europe, private-aviation companies like the Moscow-based Your Charter Solutions and Mediterranean charter firms catering to Russian clients who routinely fly in and out of that region, are certain to be economically damaged by the restricted airspaces. One executive at a UK private aviation firm, asking to remain anonymous, said that most of his company’s business did not involve Russians. “A few of our clients are generally more apprehensive about flying now,” he said, “but most of our brokers are not reporting an immediate impact on demand.”

Russian Sanctions Have Impacted the Business Jet World in Europe

Some analysts are expecting a selloff of Russian-owned private jets as sanctions prompt banks to cancel aircraft loans. 

Image by John Taggart Licensed under CC BY 2.0

Air routes are already changing. Flights from Europe to Asia, which typically flew over Russian and Ukrainian airspace, are now diverting south, according to Pawel Laben, who monitors international trip and flight planning for Jeppesen. “There’s now a huge black hole over Ukraine and most of Russia,” said Laben. “Customers are rerouting flights they had planned weeks ago. Flying over the Middle East will increase flight time significantly, and will make the permit process much longer. The aviation world, as we know it, changed on February 24.”

Source: Robb Report

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