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10 Mar, 2022 08:30

Russia may retain foreign aircraft and pay for them in rubles

The Transport Ministry proposes not returning leased planes if contracts are voided due to sanctions
Russia may retain foreign aircraft and pay for them in rubles

The Russian Ministry of Transport has proposed retaining aircraft leased from foreign companies and paying for them in the national currency, a resolution published on the portal of draft regulations on Thursday states.

The document establishes a new procedure for the execution of lease agreements for foreign aircraft and aircraft engines amid the Ukraine-related anti-Russia sanctions.

According to the draft, if the contract between a Russian airline and a foreign aircraft lessor is terminated at the request of the latter, including ahead of schedule, a government commission on import substitution is to decide whether the aircraft should be returned. In the absence of such a decision, airlines can continue to use the aircraft until the end of the initial term of the lease contract.

In addition, if the contract was executed in 2022, settlements between the aircraft owner and the airline are to be carried out in Russia’s national currency, the ruble.

An explanatory note to the document states that the draft resolution has already been approved by Russia’s Ministry of Finance, the Ministry of Economic Development, and the Ministry of Justice. The proposed regulation would apply to contracts concluded before February 24, 2022.

The proposal comes after the EU imposed a ban on selling and leasing planes to Russian airlines last month, as part of a package of restrictions placed on the country amid Moscow’s ongoing military operation in Ukraine.

Brussels gave leasing companies until March 28 to end current rental contracts in Russia. Reports then emerged that Russian authorities were discussing nationalizing Airbus and Boeing planes, which constitute the majority of the country’s civilian aircraft fleet.

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