Putin allows Russian airlines to fly $10 billion worth of foreign-owned planes

Foreign aircraft lessors seeking to recover some $10 billion worth of planes from Russia were dealt another blow Monday when President Vladimir Putin signed a law clearing the country’s airlines to fly the planes domestically.

Sanctions and reciprocal airspace closures in response to Russia’s invasion of Ukraine last month have closed off Russia’s air travel market. Boeing and Airbus have said they will no longer supply parts to Russian airlines. That could force Russian carriers to cannibalize other jets for parts.

There are some 728 Western-built aircraft in Russian airlines’ fleets, 515 of them leased to Russian carriers by foreign lessors. Under EU sanctions against Russia, aircraft lessors, some of which are based in EU-member Ireland, have until March 28 to recover the planes.

Under new Russian rules, civilian aircraft in Russia will allow the country’s government to provide airworthiness certificates to the planes and register them in country, according to Russia’s state news agency Tass. The law was in the works last week.

“There’s an occasional nightmare but the idea of an entire aviation market being taken off line and flouting international laws, that’s new,” said Richard Aboulafia, managing director of aviation consulting firm AeroDynamic Advisory.

Aeroflot and S7, two of Russia’s biggest airlines, last week stopped flying internationally. Flights abroad could mean lessors could repossess the planes.