Sanctions Strain: Russia Turns to Indian Airlines for Domestic Flights

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Tejaswini Deshmukh
Tejaswini Deshmukh
Intrigued by the intersection of finance and technology, I delve into the latest RegTech advancements. With a keen eye for unraveling the complexities of compliance, I dissect current financial news and frauds.

In recent times, Russia has been facing tough challenges due to Western sanctions. These sanctions have made it difficult for Russian airlines to operate effectively. To address these challenges, Russia has turned its attention to India, inviting Indian airlines to help operate domestic flights within its borders. This move is significant and shows how countries can work together in tough situations.

Russia’s Proposal to Indian Airlines

According to reports, Russia has proposed a “cabotage” agreement to India and some other countries. This type of agreement allows foreign airlines to carry passengers within a country’s borders. For instance, Indian airlines could potentially operate flights not just from India to Russia but also within Russia itself.

The idea was first mentioned about a month ago and was discussed further during Indian Prime Minister Narendra Modi’s recent visit to Russia for the BRICS summit. Russian airlines have been struggling to meet the travel demands of their own people because of the sanctions imposed by Western countries. These sanctions have restricted Russian carriers’ access to important aircraft parts and new planes from American and European manufacturers.

Challenges for Indian Airlines

However, the Indian airlines are not jumping at this opportunity without concerns. They have expressed worries about whether operating flights in Russia would be feasible. One major concern is that many Indian airlines rely on leased aircraft. This means they do not own the planes outright but instead rent them from other companies.

Many of these aircraft lessors are hesitant to allow their planes to fly to Russia. They are worried about the restrictions and the risks associated with operating in a country facing heavy sanctions. An airline executive shared that this situation, along with the possibility of losing insurance coverage, makes the proposal challenging. The insurance companies, like the lessors, are also affected by the sanctions, which makes flying to Russia even more complicated for Indian carriers.

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In addition to these issues, Indian airlines are already dealing with their own problems. They are facing a shortage of planes to meet the growing demand for air travel within India. This lack of available aircraft makes it difficult for them to consider flying into Russia, even if the opportunity arises.

The Impact of Sanctions on Russian Airlines

The sanctions have significantly impacted Russian airlines. Before the conflict in Ukraine began, many Russian airlines operated fleets primarily made up of Boeing and Airbus aircraft. However, since the sanctions have taken effect, there have been no new deliveries of planes to Russia. Some aircraft that were supposed to go to Russian airlines have been redirected to other markets, such as Air India, which recently received Airbus A350 planes that were originally intended for Aeroflot, a major Russian carrier.

Furthermore, Western companies have stopped providing important support for Russian aircraft. This includes components and software updates, which means that many planes in Russia are now grounded and unable to fly. As a result, the total number of active aircraft in Russia has decreased from 874 in 2019 to just 771 today.

According to the Centre for Aviation (CAPA), the number of flights available in Russia remains similar to what it was before the pandemic. In fact, the report suggests that the growth of passenger traffic in Russia is expected to be minimal. CAPA estimates that by 2027, around 98.8 million passengers will travel in Russia, which is about the same number as in 2024.

Despite these challenges, India and Russia continue to maintain strong trade ties. India has been one of the few countries that allow Russian airlines to operate flights, providing a vital connection for travel. For example, Air India takes advantage of Russian airspace, which allows them to have shorter flight times compared to airlines from Europe and the United States.

In conclusion, while Russia has reached out to Indian airlines to help meet its domestic travel needs, various challenges, including sanctions and aircraft leasing issues, make this proposal complicated. The situation remains dynamic, with both countries navigating the difficulties presented by the current geopolitical climate.

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