The Ukraine Invasion Implications On Commercial Aviation
March 04, 2022
The air transport industry and its suppliers have been hoping for a much better year in 2022. Needless to say, 2020 was the sector’s worst in history, and 2021 turned out to be better but not as good as hoped, since the recovery took longer and suffered many setbacks. And now the industry is facing its next major crisis: Russia’s invasion of Ukraine.
For now, it is not nearly as severe as the global health crisis, and its effects vary greatly by subsector and geography. The depth of the effect on commercial aviation will depend on how long the invasion continues and how much aggression escalates. Although nothing can be said with any certainty at this stage, some consequences are discernible already.
Russian airlines have been hit the hardest.
Credit: Daniel Slim / AFP / Getty Images
They are banned from many international markets, and lessors might repossess large parts of their fleets, a measure announced as a consequence of Western sanctions against Russia.
Lessors are taking a hit.
But the exposure to the Russian airline market is generally not that high. AerCap, which leases some 100 aircraft to Aeroflot and Pobeda, says Russia comprises about 5% of its portfolio.
Western European airlines not as affected.
Credit: Rob Finlayson
Russia is not a major market for Western European airlines even in normal times. The coronavirus pandemic has further reduced traffic, in part because the EU has not certified Russia’s Sputnik vaccine and so severe travel restrictions remain in place for Russians.
OEM have relatively little exposure to Russian carriers.
Credit: Airbus/Stefan Kruijer
Airbus and Boeing combined backlog from Russian carriers is 89 aircraft.
Supply chains may be disrupted.
Credit: S7 Technics
Russia is an important supplier of raw materials. Aircraft- and engine-makers say they have taken the precaution of stocking up, but disruption could occur, particularly as Boeing and Airbus ramp up production.