Russia’s Aeroflot resumes flights to Iran
Russia’s flagship airline Aeroflot will resume flights to Iran today.
The resumption comes nearly one month after Russia suspended Aeroflot’s global operations in response to European countries halting flights to (and over) Russia. Required by international sanctions imposed on Moscow, major aviation lessors were given until March 28 to obtain their aircraft in Russia. Russia had leased over 500 airplanes across all of its airlines. Lessors failed to seize most planes as they were not voluntarily returned and lessors were not allowed into the country. Further, Putin signed a bill in mid-March allowing Russian airlines to re-register foreign aircraft to the domestic registry.
As a result, lessors have been thrust into default. In the medium to long term, the business community in the West is unlikely to lease aircraft to Russia again as companies have recently signaled hesitation to market re-entry. Since most of the world’s major aircraft leasing companies reside in the West, Russia may try to offset the absence of new aircraft by increasing domestic production. However, it won’t be sustainable due to a lack of qualified aircraft engineers. Thus, Moscow will also likely pursue commercial deals with China, which has several large aircraft leasing companies.
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