Overview
Russia’s civil aviation sector is already in a deep crisis due to the growing package of export control and sanctions leveled against the country. The sanctions and export controls are affecting the country’s civil air fleet on multiple levels and exacerbating decades of neglect in key sectors of the country’s industrial base. The U.S. and EU sanctions, in particular, have led companies to freeze technical support, spare parts, supply of aircraft, leasing of aircraft, and maintenance to Russia. Around 700 of Russia approximately 900 aircraft designed for civil aviation will be affected in one way or another.[1]
Russia’s civil air fleet is overwhelmingly reliant on Western manufactured engines. Previous rounds of sanctions have stimulated Russia’s domestic development of composite materials and avionics, but full commercial engines will be a difficult transition in conditions of near autarky.[2] Aviation data acquired by the Wall Street Journal shows that of commercial aircraft serving of in storage in Russia, there are 370 Boeing aircraft and 345 Airbus.[3] The third most-popular planes are produced by Sukhoi, but these airframes are reliant on joint Russian-Western partnerships. According to the analysis of the Wall Street Journal, only 17% of Russia’s domestic air fleet is domestically produced.
Import Substitution
The natural instinct for Russian leaders, and Putin in particular, is to involve Russia’s expansive military industrial base in the creation of domestic products. Russia has a number of research centers with wind tunnels that test hypersonic flight and cutting-edge aircraft. In fact, civil aviation engines under development such as the PD-8 and PD-14 are being developed under the auspices of state arms manufacturer Rostech.[4] Despite these competitive advantages in research and design of cutting-edge aerospace technology, Russia’s debt-laden and unwieldy defense enterprises are not able to produce globally competitive products despite years of government efforts.[5]
Compounding problems is Russia’s lack of a robust domestic electronics industry. Modern airplanes are reliant on a great deal of integrated circuits and advanced electronics. Despite robust attempts to build a domestic manufacturing capacity, Russian chipmakers were already struggling to meet orders for domestic import substituted chips before February 24th.[6] Deliveries of the Irkut-produced MC-21 domestic airliner, a self-declared replacement for these foreign aircraft set was set for mass production in 2022, but may be delayed due to chip shortages.[7]
Safety and Maintenace
Russia’s Air Ministry is extending the licenses of aircraft creating fears that the ministry is simply lowering safety standards for flights.[8] There are early indications that this approach may already be putting passengers in danger. The semi-independent Russian business daily Kommersant, carried reports that there have been at least two incidents of autopilot failures on Airbus 320 flights made by the Russian carrier Ural Airline.[9] Some in Russia hope older Airbus 320s and 747s using the older CFM56 engines will be easier to maintain via secondary markets. A professor at Moscow’s Higher School of Economics told the newspaper, “We are in a situation where there are no good options. Either don’t fly at all or take risks”.[10]
Russia has domestic maintenance crews in place, but without the proper parts, tools and materials it will be difficult to maintain the fleet over the long haul. Some companies have looked to the UAE and Turkey for more advanced repairs that cannot be done in Russia, but fear of secondary sanctions has thwarted this according to managers at Russian airline companies.[11] Aeroflot in particular has pointed to the UAE and China as potential destinations for critical repair and maintenance.[12] Creative attempts to avoid the sanctions and export control regime, such as putting dozens of Russian aircraft into foreign registries, has so far, been prevented by the Kremlin.[13]
Chinese investment and intervention to prop up or save Russia’s economy from collapse remains the million-dollar question. With access to vast capital reserves and technology, China is theoretically poised to step into the gap left by Western providers if there is the political will to do so in Beijing. Fears of secondary sanctions have put a damper on investment so far. Officials from Russia’s air ministry told Interfax that attempts to procure replacement parts so far have been rebuffed.[14] Absent political will from top leadership in Beijing, there is little reason for profit-oriented companies to invest their money in a market with a business environment as toxic as Russia’s.[15]
Conclusion It may take years for Russia to bring its domestic Boeing and Airbus equivalents into serial production enough to make up for the losses.[16] Officials are speeding up the certification process of domestically produced engines.[17] But the problem remains that in relying on global supply chains for domestic civil aviation has put Russia in a place, where an entire sector of the economy is now at a breaking point. Without the involvement of foreign companies in the market, and without the ability to procure spare parts, Russia’s civil aviation sphere faces nothing short of catastrophe.
[1] https://www.kommersant.ru/doc/5239501
[2] https://www.kommersant.ru/doc/5236969
[3] https://www.wsj.com/articles/russia-cant-fly-without-the-westbut-may-eventually-propel-china-11646738302
[4] https://rostec.ru/news/rostekh-izgotovil-uzly-dlya-demonstratora-dvigatelya-dlya-ssj-new/ and https://rostec.ru/news/odk-i-gazprom-dogovorilis-o-sotrudnichestve-pri-sozdanii-dvigateley-na-baze-pd-14/
[5] https://ridl.io/en/the-inner-workings-of-russia-s-military-industrial-behemoth/
[6] https://www.kommersant.ru/doc/5009185?query=%D0%B0%D0%BE%20%D0%BC%D0%B8%D0%BA%D1%80%D0%BE%D0%BD
[7] https://www.kommersant.ru/doc/5236969 and https://trends.rbc.ru/trends/industry/622b2d7b9a7947dd4d90bc07
[8]https://www.kommersant.ru/doc/5249920
[9]https://www.kommersant.ru/doc/5249920
[10] ibid
[11] https://www.kommersant.ru/doc/5239501
[12] https://www.kommersant.ru/doc/5236969
[13] https://thebell.io/neizbezhnyj-defolt-valyutnyj-kontrol-natsionalizatsiya-inostrannogo-biznesa-i-ostanovka-mezhdunarodnyh-rejsov
[14] Китай отказал России в поставках авиазапчастей (interfax.ru)
[15] https://thebell.io/rossiyu-mozhet-zhdat-defolt-chto-eto-znachit-i-v-chem-raznitsa-s-1998-godom