Russia bans some foreign flights to prevent aircraft seizure

Bloomberg

Russia will halt some international flights to keep billions of dollars’ worth of aircraft from being taken back by their foreign owners, deepening a rupture in the global aviation industry triggered by the invasion of Ukraine.
The government’s move will give Aeroflot and other Russian carriers cover to hold on to hundreds of Airbus SE and Boeing Co jetliners that their owners are demanding be returned.
Leasing firms, many based in Ireland, are seeking possession of the aircraft by March 28 under European Union sanctions and a broader set of banking prohibitions that make it impossible to legally continue renting and insuring the planes.
The loss of more international flights is set to isolate Russia further after the EU, the US, Canada and the UK were among countries closing their airspace to its jets in response to the invasion of Ukraine. The break has ripped through what was, until late last month, a highly integrated and cooperative network for international air travel.
Ticket prices have jumped in Moscow in recent days, with fewer flights available to a shrinking number of places.
A number of smaller carriers — from Serbia, for example — were also offering flights.
The order takes effect starting from Sunday and applies to airlines that have leased planes from foreign owners, Russia’s aviation regulator said in a statement. It cited “the high risk of Russian airlines’ planes being held or seized abroad.”
Aeroflot, Russia’s flag carrier and its most prominent link to foreign destinations, said that it will halt all international flights by March 8, the deadline for return trips. Azerbaijan Airlines said it will halt all flights to Russia.
For plane owners doing business in Russia, the rapid and unprecedented collapse of industry norms has given way to uncertainty.
Foreign lessors are grappling with how to retrieve the planes, with reports of at least one seizure from Aeroflot’s Pobeda unit in Turkey.
Investors, meanwhile, are attempting to understand the exposure for companies such as AerCap Holdings NV, Carlyle Aviation Capital and SMBC Aviation Capital, each with more than 5% of their fleets leased to Russia, according to aviation consultancy IBA.
AerCap, the world’s biggest leasing firm, has the most planes in Russia at 152, with a market value approaching $2.5 billion, according to IBA.
AerCap said that it would stop trading with Russian airlines and try to retrieve its planes.
The Dublin-based lessor’s Russian customers include Aeroflot, S7 Airlines, Rossiya and Ural Airlines, according to its website.