Russian aviation on the verge of collapse – sanctions are crushing airlines!

Russian aviation on the verge of collapse – sanctions are crushing airlines!

In a dramatic turning point for the Russian aviation industry, hundreds of Western aircraft stranded in Russia due to sanctions are at risk. These aircraft were summarily confiscated by Russia, significantly endangering the economic situation of 30 Russian airlines, which together cover around 26 percent of domestic passenger air traffic. According to a report by fr.de It could mean the end for many of these airlines in 2025, after they have already suffered from extreme Western sanctions since the start of the Ukraine war.

The situation is alarming: many airlines have already stopped paying leasing fees, leading to a mountain of debt that could crush them. Monthly leasing costs for a used Airbus A320 range from $80,000 to $150,000. Only a few large airlines, such as Aeroflot and Ural Airlines, were able to buy back their planes, supported by funds from the Russian Prosperity Fund. This reported HNA.

Debts and bankruptcies threaten

Russian airlines are facing a serious threat: if the debt on the leasing contracts becomes too high, this could lead to massive bankruptcies. The Kremlin plans to allow airlines to write off their debts in 2025, but this amount will be subject to a 25 percent income tax. This additional financial burden could bring many companies to their knees, warned the Russian newspaper Izvestia.

Another major problem is the dependence on Western know-how and spare parts. Wilson Center estimates show that over 80 percent of the fleet of the 20 largest Russian airlines consists of foreign aircraft. Without access to spare parts, it is only a matter of time before working aircraft run out, which could plunge the entire industry into an even deeper crisis.

The consequences of the sanctions

Western sanctions have hit the Russian aviation industry hard. Within days of the start of the sanctions, airlines were cut off from the global market and lost access to international destinations, leasing contracts and technical support. Almost a dozen airports are closed to civilian aircraft, further exacerbating the situation.

The Russian government has already invested around $4.5 billion in the aviation industry in 2022 to prevent an implosion. This year, airlines carried 95 million passengers, with 90 percent of those flights being domestic. Without government support, that number would have fallen to 74 million, highlighting the industry's dependence on the Kremlin.

In conclusion, the Russian aviation industry is in a critical situation, aggravated by Western sanctions and internal economic problems. The future of the industry now depends on airlines' ability to compete in an increasingly hostile economic environment.