Russia’s Air Transport Industry Deals With Ukraine War Fallout

Boeing 777

Aeroflot’s Boeing 777 operations are heavily impacted by Western sanctions.


Russia’s air transport industry managed to survive almost a year in a new reality shaped by the war in Ukraine and sanctions that cut access to lucrative Western markets and modern aircraft technologies. The impact has not been as significant as expected because Russian airlines and the Kremlin are applying pandemic-inspired remedies to mitigate the fallout.

Russian airlines carried 95 million passengers last year, Transport Minister Vitaly Savelyev says. Demand was 15% lower than in 2021, when Russian air transport began recovering from the COVID-19 crisis. The numbers announced did not meet the government’s goals—it had expected in mid-2022 that airlines would carry a combined 100 million passengers on domestic and international routes.

  • Airline traffic results fall below expectations
  • Spare parts supply presents challenges, but most aircraft continue to fly

The drop in traffic was due in part to the government’s decision to keep 11 southern Russian airports closed beginning in late February because of their proximity to the Ukraine combat zone, Savelyev says. Among those airports were Simferopol International Airport in Crimea (which served 6.8 million passengers in 2021), Krasnodar International Airport (5 million), Anapa International Airport and Rostov-on-Don Airport (2.9 million passengers each) as well as some smaller airports. These gateways could have added 19 million passengers to the total traffic, which would have exceeded the previous year’s numbers, he points out.

But the lower numbers were not considered a failure. “I expected the air traffic would amount to only 80-85 million passengers, taking into account the closure of the airports and restriction for international services,” Fyodor Borisov, a senior expert at the Institute of Transport Economics and Transport Policy Studies at Moscow-based HSE University, tells Aviation Week. He says the government managed to avoid a greater traffic slump by introducing direct subsidies, which allowed carriers to adjust fares in order to support demand. “Taking into account inflation in Russia in 2022, the real price for air travel fell,” Borisov says.

Savelyev confirms that the government allocated a record-breaking 174 billion rubles ($2.5 billion) last year to the industry. This support included 100 billion rubles for domestic air services and 19.4 billion rubles to compensate for ticket refunds for canceled international flights. Another 2.9 billion rubles went to support freight services.

In fact, the direct impact of sanctions on the Russian air transport industry was similar to that of the pandemic restrictions, when local carriers also lost most of their international routes. Western countries have banned Russian airlines from their airspace while many others do not allow Russian-operated aircraft with double registration.

“Those who planned to rely on the international services had to completely reorganize their activities,” Borisov says, adding that most Russian airlines were not caught by surprise because they had started this process during the pandemic.

The country’s largest gateways, Moscow’s airports, lost their importance as major international hubs. The largest of the Moscow trio, Sheremetyevo International Airport, recorded 28.4 million passengers last year, a 7% decline.

The other airports have not yet published annual results, but Russian media report that Domodedovo experienced the strongest drop in total traffic—15% to 21.2 million passengers—while Vnukovo lost about 9% and to 16.4 million passengers.

Russian airlines will have to look to the domestic market for new revenue. S7 Airlines reports that it increased its share on the Russian market to 17% by focusing on direct flights between Russian regions, avoiding the national capital. Its non-Moscow traffic grew 22% during the year to 5.8 million passengers. S7 also developed its two Siberian hubs, increasing traffic by 21% in Novosibirsk and 54% in Irkutsk.

These efforts enabled privately owned S7 to outperform its major rival—government-controlled Aeroflot—and become the country’s largest airline, at least in March and April. S7’s total traffic declined a relatively low 10% in 2022 to 16 million passengers.

Aeroflot reports that it carried 20.5 million passengers (a decline of 4%) in 2022 for the main carrier and 40.7 million (-11%) as a group. It had to drop its previous plans to hand over the domestic network to low-cost subsidiary Pobeda and fly to only the most profitable long-range international destinations from its traditional hub in Moscow. Instead, Aeroflot group now is focused on developing regional bases across Russia to provide point-to-point domestic services. In 2022, it added Sochi and Mineralnye Vody in southern Russia to its non-capital bases in Krasnoyarsk in Siberia and St. Petersburg. It also plans to use Khabarovsk or Vladivostok as a base in Russia’s Far East and is looking to set up another base in the Volga River-Ural region.

The distinctions between the Aeroflot group’s airlines will become less obvious. According to the newly adopted development strategy, the parent airline will offer only a high-level product. Rossiya will have the balanced one while Pobeda will work with the basic product.

Nevertheless, Aeroflot continued to reset its Western-made fleet for international operations. The carrier bought back 10 Boeing 777 and eight Airbus A330 widebodies from foreign lessors and withdrew them from foreign registers. CEO Sergey Alexandrovsky says the airline moved 89 of its 150 operational aircraft off double registration, allowing them to fly to available destinations outside Russia.

Russian airlines kept almost all their prewar fleets because the government forbade their return to foreign lessors. Savelyev said on Jan. 24 that Russian airlines now operate 1,164 passenger aircraft, 200 fewer than the number he cited in March 2022. The Kremlin forced the carriers to transfer all leased aircraft to the Russian register without the consent of their foreign owners and entitled the local regulator, the Federal Air Transport Agency, to deal with their continued airworthiness.

Maintenance costs have grown due to more complicated logistics after Western sanctions banned deliveries of aircraft spare parts to Russia. In an interview on Russian media at the end of 2022, Aeroflot CEO Alexandrovsky admitted that the sanctions had increased spare parts costs and delivery time but said the airline had spare stocks of 2-6 months, depending on the items.

The Russian government expects the industry to increase production of fully Russian-made aircraft by 2030 to replace the aging Western-made fleets. The industry was tasked with rolling out 142 Superjet-NEW regional jets, 270 Irkut MC-21-310RUS and 70 Tupolev Tu-214 narrowbody airliners as well as about 500 smaller passenger aircraft by then. Russia’s largest private carriers—S7 and Ural Airlines—expressed concern that most of the announced aircraft had already been contracted by Aeroflot.

The latter placed preliminary orders for 89 Superjets, 210 MC-21s and 40 Tu-214s. Alexandrovsky sees these orders as a guarantee for Aeroflot to have a working fleet, since it is unclear how long the Western-made jets can stay airborne. The group expects that in 2030, the Russian-made aircraft will constitute 70% of its fleet, which will grow from the current 340 airframes to more than 500 airliners.

The Kremlin also understands the uncertainty of the future, which might depend on the outcome of the Ukraine conflict. “We plan to carry over 101 million passengers in 2023,” Transport Minister Savelyev promised President Vladimir Putin, but he added that the final result will depend on how long the airports in southern Russia remain closed.