Dobrolet Grounded by Broadened EU Sanctions Against Russia
Russian low-cost carrier Dobrolet suspended all operations on August 4, 2014 after recently imposed European Sanctions against Russia in light of ongoing investigations into the Malaysia Airlines MH17 tragedy and Russia’s role in the Ukraine crisis, impacted its operations. According to parent carrier Aeroflot Russian Airlines the “temporary” grounding comes as a result of annulled aircraft insurance agreements, the suspension of the supply of aeronautical information and leasing, repair and maintenance agreements relating to its Boeing 737-800 fleet.
The grounding of the carrier follows just days after the European Union (EU) broadened its sanctions against Russia and added Dobrolet to its list of companies that EU persons and entities are prohibited from doing business with. In documentation the EU said that as a subsidiary of a Russian state-owned airline, Dobrolet had exclusively operated flights between Moscow and Simferopol since Russia’s annexation of Crimea. “It therefore facilitates the integration of the illegally annexed Autonomous Republic of Crimea into the Russian Federation and undermines Ukrainian sovereignty and territorial integrity,” it added.
Dobrolet launched operations in June this year between Moscow’s Sheremetyevo International Airport and Simferopol, in the disputed Crimea region of Ukraine. It was in the process of a major domestic expansion with flights From the Russian capital to Volgograd commencing on August 1, 2014 and services to Samara (from August 15, 2014), Ufa (from August 16, 2014), Ekaterinburg and Perm (from August 29, 2014), Surgut (from August 30, 2014) and Kazan (October 1, 2014) all due to commence over the coming weeks.
Dobrolet said in a statement that it has been “forced to suspend flights temporarily” due to the sanctions. On the English language site it displays prominently the message “Due to EU sanctions against Dobrolet, we have to suspend all flights since August, 4th,” but its Russian language website confirms more details on the grounding, confirming it is related to the cancellation of a leasing contract for its Boeing 737-800s.
The budget carrier currently operates two Bermudan-registered 737-800s leased from BBAM Aircraft Leasing and Management and is due to receive a third example shortly from Dublin-based lessor SMBC Aviation Capital. It is understood that these aircraft will be returned to the lessor’s management with immediate effect.
Dobrolet hopes to maintain schedules while it sources additional aircraft and has confirmed it will switch passengers on its current two routes to Simferopol and Volgograd to Orenburg Airlines with flights continuing with the new provider until September 15, 2014 and August 20, 2014, respectively. Although its other planned routes will be “temporarily cancelled,” it said.
It is not clear how any further broadening of sanctions could impact other Russian operators. Dobrolet was specially identified and named in the EU’s sanction list due to its operations into the disputed Crimea region, but any tougher action could have a significant impact on the country’s commercial aviation sector as most airliners in Russia are leased, and many are registered either in Ireland or in British Overseas Territories, such as Bermuda.
“As the UK is responsible for the foreign affairs of its Overseas Territories, it is possible that future sanctions could affect other lease agreements with other airlines,” one Russian analyst told The HUB.
There are also question marks over whether the sanctions could impact wider air services between the European Union and Russia, which are controlled by restricted bilateral air service agreements. An expert in business relations between the European Union and Russia told The HUB that history shows us that Russia has previously been a regular user of "tit-for-tat tactics" to make diplomatic stances. This hypothetically could lead to some form of retaliatory action that could result in traffic rights being restricted or even revoked for European operators to fly into Russia or simply over its airspace, a popular routing between Europe and Asia. The latter would cause a major inconvenience to the aviation business but would also impact Russia, which secures significant income from overflight charges.