Business aviation and sanctions. Who else flies and what should an airplane owner do?
Mar 24, 2022
What is happening at the moment in business aviation? Is it possible to rent an airplane for flights to Europe and what airplanes can still be flown on. What is the situation with the purchase and sale of business jets? How should private jet owners behave?
I would really like to say that the patient is more likely to be alive than dead, but I have to admit the opposite. Just as we began to recover from the consequences and restrictions associated with the Covid-19 pandemic, another disaster came that neither business nor aviation had ever encountered.
Our country launched a special military operation on February 24, and in response, on February 25, 2022, the European Union imposed severe sanctions on various industries and sectors of the economy, including aviation Article 3c Regulation (eu) 2022/328 amending regulation (eu) 833 /2014. It is now prohibited to sell, supply, transfer or export, directly or indirectly, goods and technology suitable for use in the aviation or space industry as specified in Annex XI, whether or not originating in the Union, to any natural or legal person or organization or to an authority in Russia or for use in Russia. It is prohibited to provide insurance and reinsurance, directly or indirectly, in respect of goods and technologies listed in Annex XI to any person, organization or body in Russia or for use in Russia.
You are prohibited from providing any one or any combination of the following
activities: overhaul, repair, inspection, replacement or modification of an aircraft or its component, with the exception of pre-flight inspection,
in relation to goods and technologies listed in Annex XI, directly or indirectly
owned by any individual or legal entity, organization or body in Russia and/or for use in Russia.
Added to this is the ban on flights of Russian aircraft over all of Europe, and the icing on the cake is that all European business aviation operators refuse to transport Russian citizens even within the EU.
Now let's look at the facts about what this means for aircraft owners and for those wishing to buy a charter flight.
The owner of a foreign-made aircraft was faced with the fact that at the beginning of March 2022, the insurance company sent out a notice that the territory of the Russian Federation and Belarus was now a war zone and the insurance policy no longer covered these countries, and if they refused to leave these territories, it would be completely canceled. It is worth noting that some business jets were insured by Russian insurance companies, but they, in turn, reinsured their risks with their Western colleagues, which implies the same disastrous outcome. At the moment, Russian insurance companies (not all) are ready to issue insurance, but the trouble is that foreign operators flatly refuse to accept it.
Following this, the aircraft owner began to receive notices of termination of the management contract from the operator, refusals to provide services and spare parts under post- and warranty support programs from manufacturers and other suppliers.
Someone managed to drive the aircraft beyond the borders of the Russian Federation, but as a result of the wrong choice of parking, some owners received “arrested” vessels. Some of the aircraft were stuck in technical centers due to refusal of service and provision of spare parts. And someone is now forced to simply pay for parking their jet in another country without the possibility of using it, and this is perhaps the best option at the moment.
According to available information, a very small part of the owners left the aircraft in the Russian Federation with the aim of registering them in our country. It would seem that a solution has been found, but unfortunately this is far from the case. There are very few Russian pilots trained to fly foreign technology, and for some types there are none at all. Training in the current realities is impossible: training centers refuse to provide services to Russian pilots. But even with a crew, flights on such an aircraft will be possible only until the first breakdown or major maintenance, which is also impossible on the territory of the Russian Federation. But people who value safety very highly will definitely not fly on such an airplane. So in the near future, such aircraft will also be confined to the ground.
What should a private jet owner do? Should I wait or sell the plane now?
There is no clear answer. In any case, for the industry as a whole this is already a strong decline in volumes, and in the near future (if the situation does not change, then according to our forecasts this is from 3 to 6 months) this amount will be almost equal to 0.
What will a person face who just wants to fly now to his villa in Greece or chalet in Switzerland? It is impossible to buy a direct charter from Moscow to Europe, even with dual citizenship. Only through 2 connecting flights: the first - to Turkey, the UAE, Israel, ETC countries, and the second - to Europe, but on a regular flight, not on a business jet.
It would seem no big deal, well, it became a little more expensive, but upon closer examination everything is far from the case. On the first flight
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