Sanctions Push Russian Bizav To Near Collapse

 - March 2, 2022, 10:33 AM

The Russian business aviation industry is on the verge of collapse due to the EU and U.S. closing their airspace to all aircraft owned by Russians in retaliation for Russia’s invasion of Ukraine. According to industry analysts, this will lead to the decline of business aviation traffic in Russia by almost 85 percent and force business jets owned or controlled by Russian interests to switch to Asian and domestic routes. The move also threatens a wave of bankruptcies of Russian business aircraft charter operators and FBOs.

Amid the ever-growing threat of detentions of Russian-owned business jets by Western authorities, these owners are considering reregistering their aircraft from Western jurisdictions to offshore registries and “friendly” states such as Montenegro. While the latest sanctions apply to all Russian-owned or -controlled aircraft, regardless of where they are registered, it is unclear how authorities will determine aircraft ownership given the widespread use of anonymous shell companies.

Meanwhile, Russian business jet owners could soon see bans on repairs and insurance of their aircraft, as well as the supply of parts and components. These measures have already been implemented for Russian-owned airliners and could be extended to the business aviation sector.

Experts predict that the already approved sanctions will all but cut off business jet sales in Russia, which has historically been one of the largest business aircraft markets in Europe.