Copyright © BusinessAMBE 2023

The sanctions network around Russia is leaky. Russian airlines, for example, still manage to buy spare parts in Europe for their Boeings and Airbuses. They do so through a network of Russians in the West, affiliated companies and countries that do not support the sanctions, Meduza reveals.

The purpose of the Western sanctions is to wring the neck of the Russian economy, making funding a "special military operation" simply impossible. Since the invasion of Ukraine, Russia has been subjected to many sanctions, but not all of them appear to be foolproof.

In the news: Between March 2022 and March 2023, Russia imported 18 billion rubles (175 million euros) worth of aircraft parts.

  • The vast majority of supplied parts enter Russia via the United Arab Emirates (RUB 9 billion), China (RUB 5 billion) and Turkey (RUB 2 billion). But European countries also continue to supply, despite being labeled "unfriendly" by Russia and co-signing European sanctions.
  • Half of all deliveries go to Aeroflot, Rossiya and Pobeda, three of Russia's largest airlines. Rossiya and Pobeda are subsidiaries of Aeroflot.

Origins: Those European transfers are particularly striking. So who is supplying?

  • Meduza looked into which companies were involved in the deals. One of them is Griffon, which supplied 1.2 billion rubles worth of spare parts. The company is registered in the United Arab Emirates, and has two Russians as owners. One of them also owns two companies in Russia, also involved in the trade of aircraft parts.
  • However, shipping from Europe to Russia is a lot more difficult. Therefore, it often goes through other countries. The Lithuanian Right Direction Aero sold spare parts to Cargoline, a company in Kyrgyzstan. That in turn sold them on to Russian company Air Fly. "The owner and CEO of Cargoline assured us that he had no ties to Russia or sanctioned companies. He misled us, and apparently also falsified documents," Pavel Chalapov, the CEO of the Lithuanian company, told Meduza.

Underlying: The swaps do really hurt the Russian aviation sector.

  • Boeing and Airbus have a de facto duopoly in the aviation sector. A lot of Russian airlines also have a fleet of American Boeings or European Airbuses to transport passengers and cargo.
  • This puts the airlines in a difficult position: as a result of the sanctions, they can no longer obtain spare parts. And this has immediate consequences: in the second half of 2022, the number of aircraft accidents in Russia rose sharply compared to the first half of the year. And the trend continues: in January 2023 alone, there were eight incidents of faltering landing gear.
  • Russian airlines often have to turn to friendly countries for spare parts. These are then delivered and used, without any kind of inspection. These are often "white products," as the resale of official parts is monitored. Consequently, the white spare parts are often of lower quality.

The solution: still work out deals with foreign countries, or 'eat' own aircraft.

  • Aeroflot is working on several solutions: in April, for example, it flew an Airbus A330-300 to the Iranian capital of Tehran, where it would be repaired by an Iranian company. Iran is one of the few countries with which such a deal is going. Before the sanctions, the same deal was in place with Hong Kong-based HAECO, but since Russia was expelled from the international payment system SWIFT, it can no longer pay the company.
  • The other solution is to cannibalize aircraft. After implementing Western sanctions, it seized more than 400 aircraft, leased from Western companies, that were still parked at Russian airports. These are now being swept apart and used to patch up aircraft still flying.
  • Eventually, Russia wants to get rid of Western aircraft manufacturers, and Russian companies must fly around with Ilyushin's and Tupolev's. Only, these planes also make extensive use of Western components. Especially in the field of electronics and chips, Russia simply cannot offer its own alternative.

© The Content Exchange, source News