In the months leading up to the Winter Olympics in and around the port city of Sochi, the world’s gaze shifted to Russian President Vladimir Putin. The goodwill carried by the international symbol of sportsmanship evaporated quickly, however. For it was just one month after the closing ceremonies, that Russia unilaterally annexed Crimea, Ukraine’s strategically useful Black Sea peninsula.

The move was shocking in the West, but less so in Russia, where the former KGB agent’s popularity and national pride surged. Moscow contends that feeling has led ethnic Russians in Eastern Ukraine to fight to rejoin the Russian fold. But NATO, whose Eastern members watched Russian tanks assemble on the border, and who have seen the military’s increasingly aggressive military exercises—some of which simulated the use of nuclear weapons against them—had other opinions.

Putin’s actions, followed by fighting in eastern Ukraine, undeniably altered the geopolitical landscape. Less visible are the ripples affecting the defense, space and commercial aviation realms. But Putin’s Russia was destined to upset all those sectors significantly in 2014.

Before the year was out, NATO had directed its member nations to spend 20% of their military budgets on new equipment. France had refused to deliver a high-priced warship it was under contract to build for Russia. Eastern European nations especially felt the chill. But nations throughout the West found themselves once again in the cat-and-mouse military games with Russian forces that seemed to have faded with the end of the Cold War. Decades before.

In the space sector, Canada pulled a satellite from the launch manifest of a Soyuz rocket variant. Manufacturers began stockpiling titanium, fearing troubles in obtaining the important metal from Russian suppliers. And the U.S. moved to develop a big new rocket engine to replace a Russian powerplant used on vehicles that launch military and intelligence satellites.

In commercial aviation, Malaysia had one it its airliners shot out of the sky. The Netherlands lost hundreds of its citizens. Airlines around the world lost confidence in the intelligence they receive regarding the safety of overflights. And individual air carriers became political weapons.

In 2014, no other person has had such a sweeping impact on aerospace and aviation—for better or worse. And for all but the most cynical of observers, Putin’s far-reaching impact has definitely been for the worse. Because of this, he is the 2014 Person of the Year.

 

MILITARY 

Russia’s military claims that the thousands of militants who took control of large swaths of Eastern Ukraine during the spring and summer of 2014 were not actually working with Russian forces. Moscow also denies that its forces supplied the militants with high-tech weaponry. Rather, leaders contend, the militants acted independently, calling for the same rights as those in now-annexed Crimea.

Yet NATO says several hundred Russian combat troops are inside the region advising and training separatists, and that several thousand more Russian personnel equipped with heavy weaponry are sitting on the Ukrainian border and are, according to the alliance, “capable of destabilizing the situation at very short notice.”

Russia’s ability to rapidly deploy forces was perhaps not well understood before this year, but it is a capability—along with the modernization of its strategic and air forces—which Putin has been building since he first became president in 2000.

These actions have reverberated across Europe, dramatically altering the posture of European military forces and the defense industrial outlook.

Ukraine is woefully underequipped to fight the most significant conflict on European soil since the wars in the Balkans during the 1990s. Almost a quarter of a century after independence, its armed forces are still using the aircraft, helicopters and vehicles Russia left it with in 1991. And its personnel lack the experience for a conflict against well-armed insurgents who raided army depots and government buildings, helping themselves to weaponry that included man-portable surface-to-air missiles.

Ukrainian military officials say their country is in a condition of war with the Russian Federation. “We cannot politically declare [war] against it,” said one Ukrainian officer in London in November. “We cannot win it, and no one will support it.”

Russia’s ambiguous use of “little green men,” during its annexation of Crimea was a masterstroke. Wearing green fatigues and often black masks but no national insignia, these Russian soldiers could secure key locations across the Crimean Peninsula and paralyze Ukrainian command and control.

The region was already home to a significant Russian military presence, including the Black Sea fleet in Sevastopol and several naval airbases. That presence has grown. Intelligence reports suggest that Russia may have deployed short-range ballistic missiles; strategic aviation units may follow in the near future.

Since the beginning of 2014, the Ukrainian air force lost 10 helicopters—five Mil Mi-8 Hip transport and five Mi-25 Hind attack types. It has also lost five Sukhoi Su-25 “Frogfoot” fighters, a pair of Mikoyan MiG-29 “Fulcrums” and a Su-24 “Fencer.” Shoulder-launched weapons also downed transports—an Antonov An-26 and an An-30, along with one of three Il-76s flying a supply mission into Lughansk. In the last attack, missiles were fired from two different sites as the transport aircraft made its landing approach.

Now five months into a nearly nonexistent cease-fire, Moscow’s motives for military action in Eastern Ukraine are far from clear. If anything, damage to East-West relations may actually be growing; a palpable strain is fraying the business ties forged between Russia and the West in recent years.

That change is particularly apparent with France’s deal to sell two Mistral-class helicopter assault ships to Russia. In late November, despite threats of contractual retaliation from Moscow, French President Francois Hollande indefinitely postponed delivery of the first Mistral-class helicopter assault ship to Russia, citing the Ukraine conflict. But since suspending the 2011 contract in September, Hollande has been loath to cancel the €1.12 billion ($1.32 billion) Mistral deal with majority-state-owned shipbuilder DCNS, which has suffered anemic growth in 2014.

Russia’s buildup along the Ukrainian border—coupled with the decade-long transformation of its military fueled by the nation’s oil boom—has also forced NATO and European states to take heed. At a time when NATO members were hoping their tempo of military operations would slow with the withdrawal from Afghanistan, a resurgent Russia throwing its weight around at the alliance’s eastern borders has provided new urgency to NATO’s call for its members to spend more than 2% of GDP on defense. They are being urged to spend at least 20% of their defense budgets on modernizing equipment.

Russia’s long shadow on the border also prompted an increase in multinational exercises in Poland and Romania, while enhanced deployments of fighters to the Baltic states have helped to reassure those nations that cannot afford fighters of their own.

Despite the declared cease-fire in Ukraine, the level of Russian military activity outside the country’s borders has risen dramatically.

To allay fears in Estonia, Lithuania and Latvia, Baltic Air Policing (BAP) fighter detachments have been tripled. NATO aircraft are now also based at Amari in Estonia as well as at the usual air-policing base at Siauliai, Lithuania.

Eastern European fighters have been scrambled hundreds of times to intercept Russian aircraft operating in Baltic airspace. In just one day in early December, BAP fighters intercepted 28 Russian aircraft, which were apparently a part of a large naval exercise.

Meanwhile, the Royal Norwegian Air Force, which has a standing NATO mission to intercept military flights over the Norwegian Sea in the far north has seen a modest increase in the number of scrambles carried out in response to Russian military flights, although the number of aircraft intercepted has increased from 58 aircraft in 2013 to 80 during 2014. Russian aircraft have also been intercepted by Turkish F-16s over the Black Sea and in one incident by Portuguese F-16s over the Atlantic.

NATO has stepped up surveillance flights using its E-3 Sentry airborne early warning aircraft over Romania and Poland to monitor Russian air activity; the U.S. Air Force has increased its own surveillance flights with missions by RC-135 Rivet Joints flying daily from the U.K. to mission areas in the Baltic, the Norwegian Sea and into Eastern Europe.

The increase in Russian flights has drawn the attention of aviation safety regulators. Europe’s skies are considerably busier with commercial air traffic than they were during the ’60s and ’70s, yet many Russian military aircraft flying through international airspace do so without radar transponders, responding to radio transmissions or filing flight plans. In December, the European Commission primed the European Aviation Safety Agency to investigate several near mid-air collisions between commercial and military aircraft.

The most significant was an apparent near-collision between a Russian reconnaissance aircraft—believed to be an Ilyushin Il-20 “Coot”—and a Boeing 737 operated by Scandinavian Airlines, off the coast of Sweden last March. The incident was not investigated by safety authorities, but the European think-tank European Leadership Network report describes the incident as one of the most provocative between East and West since the Cold War. A similar incident was reported in mid-December.

Naval activity has also been on the rise. Russian submarines are at the heart of one highly publicized hunt in the territorial waters in the Stockholm archipelago wherein Swedish naval forces searched, unsuccessfully, for what was said to be a minisubmarine. 

Further hunts, first revealed by Aviation Week in mid-December and then January have taken place off the west coast of Scotland. The incidents are believed to have involved a Russian hunter-killer submarine attempting to track one of the U.K.’s Vanguard-class ballistic missile submarines. And in an embarrassing sign of how budget hawks in London may have mortgaged essential military capabilities, the U.K., without an anti-submarine warfare wing, had to call in maritime patrol aircraft from Canada, France and the U.S.

 

SPACE 

Despite cooperation in civil space efforts that overcame Cold War political differences and the increasing space collaboration between Russia and the West, the global space industry has encountered myriad impacts over the past year. Putin’s reach disrupted U.S.-Russian talks on extended use of the International Space Station (ISS) and has intensified political debate in Washington as to the future of U.S. launchers.

In recent weeks, Russian space agency Roscosmos has even suggested it could develop an alternative to the ISS, the massive orbital outpost led by the U.S. and Russia that is arguably the world’s most politically complex space program. In a year-end news conference, Roscosmos chief Oleg Ostapenko said the agency is considering station options in support of Moscow’s broader manned spaceflight ambitions. He said the project would be part of the nation’s forthcoming 10-year space roadmap for 2016-25.

“This is an ambitious project which will allow us to keep track of more than 90% of the territory of Russia,” Ostapenko said of the initiative. “It [could become an] outpost for lunar exploration and deep space.”

The 10-year plan had been expected to address Washington’s proposal for extending the ISS four years beyond its planned retirement in 2020, though geopolitical tensions have for the moment frozen any talk about extended Russian participation in the program.

As relations between Moscow and the West erode, Putin is highlighting prospects for increased high-tech cooperation with China, including defense and space collaboration.

And in January, Roscosmos deputy chief Sergei Savelyev said development of a national space station, if it were to go forward, would be tied to continued use of the ISS and furthering cooperation with China, which is constructing its own manned outpost in low Earth orbit.

In Washington, the Ukraine situation has reset the debate over the future of U.S. launchers, accelerating protests in the U.S. Capitol against using Russian-made engines to lift U.S. payloads to space, notably the RD-180 that powers the first stage of the United Launch Alliance (ULA) Atlas 5 rocket.

So far, Moscow has not cut off supply of the NPO Energomash-made engines, although U.S. lawmakers recently approved legislation that seeks to gradually wean the Pentagon from its reliance on the RD-180 and other Russian space hardware.

Buried in the 2015 omnibus spending act that became law in December, Congress appropriated $220 million to find an alternative rocket propulsion system. A report accompanying the omnibus gives the Air Force six months to draft a technology maturation program for the new development, dubbed the Competitive Rocket Innovation Motor/Engine Arrangement (Crimea) by lawmakers. The effort is expected to culminate in a demo by 2019—the deadline Congress has given for ending use of the Russian propulsion system.

In parallel, political vulnerability to the RD-180 has prompted ULA to co-fund development of a replacement engine with Blue Origin, an entrepreneurial space venture. Known as the BE-4, the propulsion system would be fueled by liquefied natural gas and could be ready for a demonstration flight by 2019.

The pressure to reduce U.S. reliance on Russian rocket technology is playing to commercial interests in the U.S. Space Exploration Technologies Corp. (SpaceX) is using anti-Russian sentiment in an attempt to unseat ULA’s virtual monopoly in U.S. Air Force launches, asserting its new Falcon 9 rocket is the only politically, technically and financially sound option for lifting national security missions.

However, Orbital Sciences Corp., has announced plans to use a Russian-made variant of the RD-180 to replace the updated Russian NK-33 engines that currently power the medium-class Antares launcher. Orbital argues the so-called RD-181 is the only viable near-term alternative to the NK-33, which is modified by Aerojet Rocketdyne and designated AJ26 for Antares. However, Orbital says it will purchase the powerplants directly from NPO Energomash, rather than through its U.S. subsidiary, a joint venture with Pratt & Whitney known as RD Amross.

The company’s procurement plan could make the RD-181 more palatable to key lawmakers, notably Arizona Republican Sen. John McCain, who has criticized ULA and the Air Force for wasting taxpayer money by purchasing RD-180 engines at a steep markup through middleman RD Amross.

More broadly, satellite operators have felt the chilling effect Putin’s annexation of Crimea had on the commercial launch industry in 2014. Earlier this year, the U.S. government slowed awards for space-hardware export licenses to Russia, although there has been no specific impact to commercial launches of Russia’s heavy-lift Proton rocket, which are managed by Virginia-based International Launch Services.

In June, however, the Canadian government—with its large Ukrainian diaspora—pulled one of its satellites from launch on a European variant of the Russian Soyuz rocket. And visas for Russian engineers and space technologists seeking to attend the annual International Astronautical Congress, which was held in Toronto last fall, were more difficult to obtain. 

In May the Moroccan government nixed Soyuz as a candidate backup launcher for the country’s two new remote-sensing satellites, a move intended to avoid potential complications down the road.

In addition, at least one Western satellite manufacturer has shifted gears in response to troubled U.S.-Russian relations. Thales Alenia Space of France and Italy, which uses some U.S. components in its commercial communications satellite bus, said it felt compelled to find a European supplier for parts on the Yamal-601 satellite it is building for Russian fleet operator Gazprom Space Systems, owing to a recent State Department ban on some technology exports to Russia.

“There have been some new rules concerning U.S. export regulations toward Russia,” Thales Alenia Space CEO Jean-Loic Galle said in September. “It was not clear, I have to say, but we prefer to be cautious and anticipate risks.”

Russian actions in Ukraine have also complicated the return to regular activity of Sea Launch AG of Switzerland, a majority Russian-owned company which launches large commercial telecom satellites atop the Russian-Ukrainian Zenit 3SL rocket from a platform in international waters in the Pacific.

In September, Sea Launch CEO Sergey Gugkaev said tensions between Russia and Ukraine had the company “closely watching what is going on because we have production sites in both countries.” But he noted a May mission that lifted an Airbus-built communications satellite to geosynchronous orbit for Paris-based fleet operator Eutelsat went smoothly. “For the time being, we are not affected by these tensions.”

In December, however, Moscow signaled plans to take over the Sea Launch program and use it to collaborate with Brazil or other so-called BRICS countries, an acronym for five major emerging national economies in Brazil, Russia, India, China and South Africa.

“A very interesting dialogue on the level of experts is taking shape,” said Russian Deputy Prime Minister Dmitry Rogozin—a Kremlin insider who has been the target of U.S. Treasury Department sanctions—in a Dec. 24 interview on the Rossiya 24 news channel.

“The idea of joint launches may be generated in the BRIC format or in bilateral relations with Brazil,” he said, noting that the Sea Launch floating pad built specifically for the Zenit rocket is based in California.

“Now, after the latest events in Ukraine, one may forget about industrial production [there], let alone high-tech manufacturing. It’s dead,” he said, citing the Sea Launch platform’s proximity to the U.S. coast near Los Angeles. “Naturally we will take it away for our own use.”

 

COMMERCIAL AVIATION

Similarly, the events in Ukraine set in motion by Putin changed civil aviation in a way that could hardly have been imagined one year earlier. On July 17, 2014, at 1:30 p.m. UTC, a Malaysia Airlines Boeing 777-200ER from Amsterdam to Kuala Lumpur with 298 people on board was in cruise over eastern Ukraine when a surface-to-air missile—fired from an area near a village controlled by Russia-assisted rebels—shot it out of the sky.

The exact circumstances of the attack remain shrouded. Recovery of wreckage, luggage and human remains is still subject to the goodwill of local warlords and has been suspended for months, long enough for crucial evidence that would shed light on events to be removed. The indications are that pro-Russia fighters were behind the shoot-down. Where the equipment came from—whether it was stolen from Ukrainian forces or brought in straight from Russia in support of the allies in the neighboring country—is not known.

Those details do not change much, and neither does it much matter whether the attack on Flight 17 was a cruel mishap from a missile actually intended to hit Ukrainian military aircraft. Civil aviation has been, if not a target, then certainly a victim of a war fueled and directly supported by Putin’s Russia.

MH17 was not the first instance in which civil aviation has been unwillingly involved in military conflicts. In fact, it often is. What makes MH17 so different is that a civil aircraft was caught up in a war that had nothing to do with the origin of its flight, its destination or its home country. The aircraft just happened to be in the wrong place at the wrong time.

The attack has destroyed the industry’s confidence in a somewhat improvised reporting system that alerts airlines about conflict zones, one heavily dependent on a carrier’s home nation’s capabilities. MH17 was also flying at 33,000 ft., an altitude that seemed safe from ground attacks because the kind of heavy weaponry necessary to reach a target that high would typically be controlled by military forces that aim at military targets flying much lower.

What the case did highlight is that the current reporting system is imperfect. As Malaysia Airlines itself criticized, some airlines, but not all, were warned of security risks in overflying Eastern Ukraine and thus avoided doing so. This fact alone is cause for an investigation.

Ever since MH17, airlines are struggling with how to deal with the new world of aviation security. Problems have escalated beyond security lines and passenger ire over screening procedures. Cognizance of conflict zones was always in play, but airlines must be even more vigilant now. For example, after Hamas attacks on Ben Gurion Airport, many international carriers temporarily suspended service to Tel Aviv. Several international airlines are pondering requesting an integrated international pre-warning system. Most experts are skeptical because a lot of the intelligence comes through informal channels that cannot easily be opened to other recipients.

The International Air Transport Association has been active in the background, organizing working groups and debates among airlines. But will an integrated, harmonized, coordinated approach really help? Those questions have taken on new urgency post-Ukraine incursion.

The damage to commercial aviation extends far beyond the MH17 tragedy. The devastating state of Russia’s economy and the fall of the ruble, caused by cheap oil and international sanctions, have forced its airlines into survival mode. Transaero, one of the country’s largest carriers, received a state-sponsored bail-out tied to conditions that force the airline to fly more to southern resorts, in other words Crimea.

And of course cooperative projects between Western aircraft manufacturers and Russia’s aerospace sector are on shaky ground. Airbus and Boeing have engineering centers in Russia, but Bombardier has shelved its plan to establish a final assembly line for its Q400 turboprop there. And although Ukraine’s Antonov aircraft continue to be assembled in Russia, this relationship is understandably fraught.  

Russia holds a trump card as a source of metals vitally important to aerospace. Companies in the West have been stockpiling titanium and other rare materials, to the benefit of RTI International, a U.S.-based rare metals company.

Whether Russia will continue on the antagonistic course Putin has set depends not just on reaction from the world community but perhaps from dissension within. Already protests have been staged, prompted by the deteriorating national economy. Whether the average Russian connects this to Western sanctions or just chalks it up to bad luck with plunging oil prices could be key to Putin’s next move.

Despite the cease-fire in Ukraine, skirmishes remain frequent. But even with new domestic challenges, Putin’s rhetoric indicates he regrets nothing. Asked at his Dec. 18 press conference whether the current economic problems were the price the country had to pay for Crimea, Russia’s three-term president took a more expansive view.

“This is actually the price we have to pay for our natural aspiration to preserve ourselves as a nation,” Putin said. “It is not about Crimea but about us protecting our independence, our sovereignty and our right to exist.” 

A version of this article appears in the January 15-February 1, 2015 issue of Aviation Week & Space Technology.

Editor's note: This story was updated to correct a detail regarding the Ben Gurion Airport attack.