5 hours ago 4

Russian Passenger Planes Are Nearly Doubling In Price As Sanctions Take Their Toll

Civilian airliners made in Russia are skyrocketing in price, sometimes nearly doubling, as Western sanctions imposed in response to the Ukraine War continue to bite. In particular, the costs of basic materials and electrical components have gone through the stratosphere, which makes Russia's long-term goal of weaning itself off of Western planes a pretty long stretch.

The MS-21, Russia's answer to the Boeing 737, has increased in price nearly 60% in just a year, the Moscow Times reports. A smaller turboprop airliner, the Il-114, is nearly twice what it was just a year ago. Other Russian-made planes are seeing increases of 45% and up. Inflation might be bad all over, but this is just killer.

The Russian aviation sector is claiming that as production ramps up, economies of scale will kick in and save the day. It ought to be getting a lot of business, at least in its own country, since the driving factor here is the fact that Russian airlines can no longer purchase from Western companies like Boeing and Airbus. When the sanctions were first thrown down, Russian airlines simply stole over 400 such planes that they were leasing by refusing to return them. But in the long run, Russia will want to fly its own planes and so as to not have to deal with the West. At these prices, though, that plan is looking less plausible.

Gray Skies And Gray Markets

A Boeing 737 operated by the Russian airline S7

When Russia kicked off its full-scale invasion of Ukraine in 2022, Russian-made planes only accounted for 37% of the entire Russian civilian air fleet, per the Novaya Gazeta Europe. That made the country's civil aviation sector hugely dependent on foreign manufacturers, particularly in the West. Indeed, entire fleets had to be grounded for lack of access to engine parts so Russia need to figure out how to replace two things: spare parts for the planes, and the planes themselves.

To build its own actual planes, Russia's domestic industry will need to step up its game, which is a lot harder when basic materials are also sanctioned. For the parts, though, Russia has figured out a few solutions, in the most Russian way possible. First up was to simply smuggle the parts into the country, sanctions be damned. As detailed in a report by Finnish outlet Yle, there is a nearly one billion euro (about $1.2 billion) gray market for Western plane parts in Russia. The trick is to buy these parts from aviation companies in other countries, such as Turkey, China, and the United Arab Emirates. They aren't supposed to sell sanctioned components to Russia, but here we are.

The second scheme is for Russia to just manufacture foreign parts themselves, essentially making counterfeit Boeing and Airbus components. As Politico notes, this is in violation of international rules, which as we all know, are something that Russia deeply cares about. These parts ought to be as reliable as, say, that counterfeit Rolex you bought for $20. Except they're going on planes with people on them.

Falling Out Of The Sky

Obviously, it's better to make your own planes than make fake parts of somebody else's. Unless of course, your planes have a habit of not staying airborne. The Novaya Gazeta Europe found that from 2000 to 2022, 80% of crash fatalities in Russia were on planes registered in the country (meaning they were serviced and maintained to Russian standards, regardless of where the plane was originally made). Would you want to get on a Russian plane, then? Didn't think so.

This is only going to get worse as Russian airlines fly foreign planes with fake parts or domestic ones that cut corners to save costs. Obviously that's bad for anybody who lives there, but it's also bad for any country that still accepts flights from Russia. Though the West doesn't these days, many nations in the Middle East and Asia still do. A bad plane is as likely to crash there as in its home country.

All together, the Russian civilian aviation sector is in really turbulent weather. It has to produce a lot of new planes to replace Western ones, but they are both less safe and more expensive than they used to be. Makes Boeing's problems look like smooth flying by comparison.

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