In Russia, lease means own

ChasenSFO

ChasenSFO

hen teaser
Russian President Vladimir Putin has signed a law allowing Russian airlines to keep foreign aircraft for use on domestic flights, according to state news agency TASS.

Moscow had signaled last week it could take such action in response to far-reaching Western sanctions.

The new law, TASS said, would allow Russian airlines to retain and operate planes rented from foreign aircraft lessors that have pulled out of the market and canceled contracts because of the sanctions.
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Putin Signs Law to Seize Foreign Aircraft, Redeploy for Domestic Use

I've read that 43 US\European-made Russian\Belarusian aircraft are currently impounded outside of Russia, so that leaves...many hundreds of them that are now proudly owned by the carriers who leased them. Also read that Lufthansa Technik services over 300 Russian airliners and has tons of spare parts in Russian facilities, and those have all been effectively stolen as well. Apparently, 90% of air travel in Russia is domestic anyway, so the demand for the jets will be there still, but I wonder how long they can keep them flying and airworthy in a safe and acceptable manner before they start scrapping rather new 777s, A350s, etc to keep planes flying.

I also wonder how lessors will react to this news. When this all "blows over", will they go after the airlines, will they ever lease to them again? A "first time" in aviation...
 
Russian leadership pining for the good old days but overshot the goal a bit as it hurtles its self into the 19th century.

By the time they unscrew this goat the people fleeing their crashing economic void will be doing it in steerage about a leaky boat.

Next season of Airplane repo could get pretty sporty though.


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Reminds me of North Korean Volvos.

In 1970, North Korea (the state) ordered 1000 Volvo 144s worth $124MM. Volvo delivered them and then got ghosted by best Corea. Every two years since, Volvo has been sending a demand for payment for the cars; the most recent was for $314MM.

What I'm saying is that Russia is doing a speed-run to become a new pariah state (at least until there are major structural changes or it begins functionally ceding geography through various capitalist and humanitarian crises).
 
DropTank said:
They probably won't recover in my life time
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Well… I mean yeah of course


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ChasenSFO said:
Also read that Lufthansa Technik services over 300 Russian airliners and has tons of spare parts in Russian facilities, and those have all been effectively stolen as well. Apparently, 90% of air travel in Russia is domestic anyway, so the demand for the jets will be there still, but I wonder how long they can keep them flying and airworthy in a safe and acceptable manner before they start scrapping rather new 777s, A350s, etc to keep planes flying.
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Russia was already the world leader in counterfeit aircraft parts 20 years ago. Don't see that changing anytime soon.

Will planes keep flying? Sure. How safe will they be? In Russia, that's always a sliding scale.
 
DropTank said:
Argentina defaulted on their debt back around 2000 and borked their economy for well over 20 years.

Russia is going to put them to shame.

They probably won't recover in my life time
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Argentina has a long history of defaulting. It’s just part of the political process there. The leftist Kirchners have been in power 20 years (minus previous Macri admin recently). They’ve nationalized industry ( the largest oil company YPF) too. Seems to be more a move of authoritarians that don’t value property rights than anything.
 
I wonder how the World Bank will approach the “yoke and arm-twist” routine with a nuclear power.

It seems to be a common refrain among loan recipients that the terms are borderline exploitatative. The responses to that have run the range from, “well, if we don’t hand-over half our oil revenue for the next five years a bunch of people are gonna starve; maybe those missionaries can help built a school instead,” to another extreme like, “this loan is a Zionist plot; we’re totally gonna take this outsized amount of money and build our military and use that to rip-off those Bretton Woods •s!” And then the debt become a problem for whoever replaces that guy.

Russia is not a sympathetic character for loan guarantees/forgiveness under a guy who operates with “gopnik diplomacy.” And I don’t see being told by a bunch of NATO countries that they should have more austerity as going over well.

So what does that leave them when they want to do some road repairs? Or keep a bunch of nuclear warheads from going further past their expiration dates?
 
I'm kinda wondering what the value of the stuff left/confiscated/nationalized in Russia (aircraft to McDonald's shake machines) is compared to the amount of assets seized by the rest of the world is?

I kinda doubt Putin is coming out ahead here.
 
Where would they fly the planes? You know the moment one leaves the CIS it'll get repo'd. Those leasing companies want their assets back
 
Skåning said:
Where would they fly the planes? You know the moment one leaves the CIS it'll get repo'd. Those leasing companies want their assets back
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Nope, leasing companies will take their insurance payouts and probably be better off than they would otherwise.

If they ever make it out of the CIS, they will be tainted and unlikely to see service with any carrier we would feel safe flying.
 
Skåning said:
Where would they fly the planes? You know the moment one leaves the CIS it'll get repo'd. Those leasing companies want their assets back
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While this will affect the leisure airlines that specialize in Black\Red Sea and Caribbean resort flying (and of course Aeroflot with their global network and large long haul fleet), 90% of the air travel in Russia is domestic. I mean VVO-DME has to be at least a 7-hour flight or more, all domestic without crossing over other nations. The issue is that very few Russian airlines operate Russian equipment these days, even the modern Superjet is already being replaced at some carriers though it was introduced just over a decade ago. So unless they figure out a way to produce parts themselves, they'll soon be forced to scrap a sizable amount of airliners in their fleets just to keep going.

A likely scenario I foresee is larger carriers like UT Air and Aeroflot buying out smaller ones just to scrap the fleets for parts rather than for route and fleet expansion. The only good news for Russian carriers is the lack of lease payments will make them bleed out a lot more slowly financially, granted they can make a domestic-only model work. I know of one Russian carrier that has the majority of its 777 fleet seized abroad, and they had lost no domestic routes. Not looking good for them. I wonder what happened to the crews overnighting around the world when this occured.
 
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