According to WingX, almost 500 business jets are somehow affiliated with Russia and currently could potentially fall under operational restrictions and sanctions imposed by Western countries. Managing Director Richard Coe said the closure of airspace and the threat of asset forfeiture in recent weeks have significantly undermined the business aviation industry's positive outlook.
Aircraft operators have to bear higher costs due to the need to change routes bypassing Russian airspace. A day after UK officials arrested the Luxembourg-registered Global 6500 jet at Farnborough Airport, experts also warned that companies need to be sure they are not violating sanctions and other restrictions, possibly unintentionally.
"A comprehensive review is now needed," aviation attorney Aoif O'Sullivan, a partner at The Air Law Firm and chairman of the BBGA, warned. The lawyer noted that it was up to the companies to determine whether the aircraft belonged to a Russian company, and acknowledged that mechanisms such as equity ownership could complicate this assessment.
According to George Galanopoulos, CEO of Luxaviation UK, comprehensive vetting can be extremely challenging given the widespread use of offshore companies hiding the identity of aircraft owners. He also noted that the obligations of operators to properly maintain controlled aircraft may now be contrary to new requirements that do not facilitate the operation of assets owned by Russia.
That position was echoed by Gama Aviation CEO Marwan Halek, who said management companies have a duty to take care of the aircraft and refusing to service those assets could easily be a breach of agreements with banks or leasing companies. "Manufacturers are now taking unilateral action on whether they will supply spare parts or not," he said.
The new rules, introduced by the UK government on March 8, made it a criminal offence to violate a ban on the use of any aircraft that has anything to do with Russia through registration or possession, even if it is chartered by Russian travelers. Galanopoulos said operators must now be more attentive to understanding who is actually paying for the flight.
According to Richard Koe, between 20% and 25% of the 469 “Russian” aircraft tracked by WingX are on the Russian register, while many others are registered offshore in jurisdictions such as Austria, Malta and San Marino. Before Russia launched its special military operation in Ukraine, Russian traffic stood at around 4,000 flights, a 25% increase in activity compared with the same period in 2019. Koe believes that charter operators in Central and Eastern Europe have been particularly affected by declining demand for flights carrying Russian clients.
"It was a very strong part of the market," Koe said. But after the conflict began, it plummeted and (for the industry) large long-haul aircraft are particularly important. The positive sentiment we saw in January has been replaced by negative sentiment, and this year we will see serious repercussions and a market reset.
