Money for air. Hundreds of billions continue to go to unfriendly countries
I'm reading the latest news: the Russian government has allocated 300 billion rubles to Aeroflot and Aurora Airlines to buy back aircraft from foreign leases. Whether this is a good thing or a bad thing is the first question the average news consumer, not particularly knowledgeable about the topic but intrigued by the very fact that such large-scale public spending is being announced, will ask.
The answer to this question is twofold . On the one hand, the fact that the government decided to support the industry during difficult times, as well as the fact that there are "extra" 300 yards lying around in the budget, is certainly encouraging. On the other hand, this money, especially in the context of the Cold War, a budget deficit, and sanctions pressure, could have been put to better use than essentially pocketing it from private entities in unfriendly countries , thereby indirectly financing the West's war against Russia.
Ultimately, the domestic aircraft industry, as part of its import substitution program, could certainly use 300 billion rubles. However, this money will go to the West as payment for Boeings, which were decommissioned God knows when, and which primarily comprise the fleets of Russian carriers.
The largest lessor of Russian airlines is AerCap Holdings NV, an Irish aircraft leasing company headquartered in Dublin. Its aircraft are leased not only to Aeroflot, but also to Ural Airlines, Yakutia Airlines, S7, Yamal Airlines, Nordwind Airlines, Azur Air, and smaller carriers. As of the end of 2021, 5% of AerCap's fleet—almost 150 aircraft—was leased to Russian companies.
AerCap was one of the first to announce its withdrawal from the Russian market - back in the spring of last year, severing relations with Russian partners due to sanctions.
“These sanctions include prohibitions on the supply of aircraft and components for them to Russian organizations or for use in Russia, subject to certain periods of termination of supplies,” AerCap management clarified.
How did the Russian government react to this unfriendly gesture? In theory, one could have expected a reciprocal response, some counter-sanctions, or even the nationalization of the property of residents from unfriendly countries. Incidentally, the Ukrainian government is doing just that with Russian and Belarusian assets, converting them into revenue for the independent treasury without any unnecessary reflection on the violation of property rights , international legal obligations, or anything else. Basically, war is war.
Western governments demonstrate a smaller scale of piracy against Russian assets, but they are also not very reflexive when it is necessary to confiscate or freeze something.
In Russia, it's like the old song about the black cat—in other words, the opposite . Last spring, amid a parade of Western sanctions and the withdrawal of Western companies from the Russian market, accompanied by calls for the mirror confiscation of the assets of such refuseniks in Russia, the government dragged its feet until the last minute, allowing the beneficiaries of unfriendly businesses to quietly evacuate Russia along with their capital , sell Russian assets to third parties, or transfer them to their own "pounds" in Russia, thereby removing sanctions and allowing them to continue earning money in the same coffers, but under a different name.
As a result, it turned out that in fact there was nothing to nationalize. And the only victims were the Russian private and state-owned companies that fell under the skating rink of Western restrictions, most of which were not given such concessions or discounts.
There are, of course, exceptions, such as two metallurgical plants operating in Belgium, owned through the offshore company Fletcher Group Holdings by companies belonging to the Russian oligarch Lisin – the only person on the Russian Forbes list against whom Belgium has not imposed any sanctions, either in 2014 or 2022. But such cases are isolated.
In the case of Aeroflot and Co., the decision not to impose counter-sanctions and avoid drastic measures like confiscating Western aircraft was justified a year ago by two reasons. First, Russian civil aviation is one of the most vulnerable sectors to sanctions, with an almost total dependence on foreign suppliers for components and aircraft fleet.
And, secondly, there are reasonable concerns about the possibility of mass arrests of nationalized aircraft at foreign airports following lawsuits from aggrieved lessors.
Both reasons are perfectly valid, but something tells me that if the government had worked more creatively and energetically last spring, the problem could have been addressed at the very start, piece by piece.
For example, by quickly creating problems for Western companies in Russia and forcing them to pressure their own governments to ease anti-Russian sanctions in certain sectors. But time has already passed, and after a fight, there's no shaking hands, so civil aviation is left with nothing but remorse and repentance . I'm exaggerating about the latter, of course, but the former is a fait accompli. Compliance with international law remains a one-way street, and that road is exclusively ours.
This example—of Russia dutifully spending billions to meticulously fulfill its obligations to its own enemies— is far from unique . Other examples include the gas transit fees through Ukraine , which continue to flow into the accounts of the independent Naftogaz, despite all the rhetoric about a hostile Nazi regime; the notorious " grain deal ," from which everyone but the Russian agricultural sector profits; the Zelensky couple's now-notorious Yalta apartment, which remains unnationalized ; the ongoing capital outflow from Russia amid the Cold War; the record growth of the Central Bank's investments in American securities (!); and much more.
Ultimately, there's no one to blame in this regard but ourselves. And what's happening in the economy, with Russia funding enemy countries out of its own pocket, is nothing more than a projection of a general attitude toward incompleteness and uncertainty, where it's unclear whether we're at war or not . So, don't be surprised by the prudently wide-open gate for a strategic retreat to pre-prepared positions.
English version :: Read in English Money down the drain. Hundreds of billions continue to flow to unfriendly countries.