Russia splashes $12 billion to keep aviation sector in the air

Agency :
Russia has handed out more than $12 billion in state subsidies and loans to keep its aviation sector afloat since Western sanctions over Moscow’s invasion of Ukraine cut off supplies of key parts and maintenance services, a Reuters analysis shows.
Dependent on foreign-made aircraft, Russia faces the daunting task of developing its aviation industry alone with domestically sourced parts, while buying aircraft from foreign lessors to avoid more of its fleet being seized.
Western planemakers Airbus (AIR.PA) and Boeing (BA.N) halted supplies of services and spare parts in March 2022 and dropped regular maintenance support for flag carrier Aeroflot (AFLT.MM) and other Russian airlines, reports Reuters.
Since then, Russia has spent 1.09 trillion roubles ($12.07 billion) supporting the civil aviation industry, including aircraft manufacturing and financial assistance for airlines, Reuters calculations show, based on data from the Ministry of Finance and the Accounts Chamber, which oversees budget execution.
The spending is almost twice as much as 547 billion roubles in payments made in 2020-21, when the COVID-19 pandemic caused a drastic reduction in air travel, and highlights the scale of the Kremlin’s effort to wrest control of a crucial industry.
“Our fleet of aircraft is very overloaded … with foreign-made planes,” President Vladimir Putin said last week. “We plan to produce more than 1,000 aircraft by 2030, our own planes. Work is needed.”
According to Swiss aviation intelligence provider ch-aviation, Russian airlines currently operate 991 aircraft, including 405 made in Russia.
But just 133 are Superjets made by state-owned producer United Aircraft Corporation (UNAC.MM). Other Russian-produced aircraft – Tupolev, Yakovlev and Ilyushin – are rarely used for commercial flights.
Support for aircraft manufacturing, a key industry, will be maintained for years to come, the industry and trade ministry said in response to Reuters’ findings.
“The main emphasis is on supporting sales, expanding production capacity and creating a post-sales service system,” the ministry said.
The importance of a reliable air industry is particularly crucial for Russia, both for transporting people and goods across its enormous territory and to bolster Moscow’s narrative that sanctions have had but a minimal impact.