According to a report from Kommersant, three Russian carriers—Aeroflot, Ural Airlines and iFly—have been negotiating with the Ministry of Transport about tapping funds from the National Welfare Fund to re-register 40 foreign-registered aircraft into Russian ownership. Analysts estimate that the insurance payouts tied to these planes could reach between 80 and 96 billion rubles. The firms would need to allocate all of their 2022 net income to cover these transactions. Meanwhile, S7 is still discussing terms with both the Ministry of Transport and foreign owners, which means that the final impact on S7 could be substantial. Kommersant notes that Utair has decided not to pursue government funding.
Details from the publication indicate Aeroflot has lined up 18 aircraft from the Irish lessor AerCap, Ural Airlines plans 19 aircraft sourced from various owners, and iFly is set to acquire three Airbus A330 aircraft from Air Lease Corporation in the United States. Earlier this summer, Aeroflot had targeted a minimum of 47 aircraft, but a source within Kommersant described the process as an unusually intricate approval sequence that slows progress.
The principal motive behind transferring aircraft from foreign to Russian ownership lies in the potential for use on international routes after deregistration from Bermuda and Ireland. As of March 13, 2022, Russian airlines operated a fleet of 721 aircraft registered in Bermuda. Projections suggest that about 520 of these aircraft would remain by year-end, with around 475 still in operation by the end of June 2023.
Russian carriers are exploring transactions with Western aircraft owners within the framework of the insurance agreement permitted under EU sanctions. For purchases involving U.S. entities, a direct purchase option might also be considered. Yet, such deals require a license from the U.S. Treasury Department via OFAC, typically issued for a three-month window and valid through the end of September.
Some airlines have already begun crunching the numbers, while others continue through the approval pipeline. A Transport Ministry source indicates that S7 does not intend to give up the possibility of state aid, and the company remains in the review phase even as it began earlier than some peers. S7 is preparing to buy aircraft from foreign charter operators and is set to review incoming applications.
A different publication previously noted that birds had started to collide with Russian aircraft more frequently, highlighting safety and operational considerations alongside the financial and regulatory discussions.