Russian carriers expand their authority to operate "wet-leased" aircraft
In a remarkable move, Putin has green-lit a law that opens the door for Russian airlines to lease aircraft and their crew from foreign airlines, revving up aircraft capacity for both domestic and international flights. This change, solidified through new laws, went into effect following its official announcement. You can find the details on the legal information portal.
Wet leasing, a mutual arrangement between airlines, typically involves a lessor providing an aircraft, crew, technical maintenance, insurance, and more to another airline (the lessee) on an hourly basis. This model is quite beneficial for carriers as it allows them to beef up their capacity during peak demand or when experimenting with new routes.
Interestingly, Russia had implemented a form of wet leasing in 2024, focusing solely on domestic flights using leased aircraft and crews from Russian airlines. Aeroflot, a major player in the Russian aviation sector, was one of the first to jump on board, leasing three Airbus A330s with crew from iFly. Following this, the head honcho at Aeroflot Group, Sergei Alexandrovsky, put forth a proposal to extend wet leasing to the international market, thus enabling Russian carriers to avail foreign-owned aircraft.
It's no secret that Russia's airline industry has been grappling with tapering passenger traffic. According to our reports, the first two months of 2025 saw a nosedive of 3.1% in passenger traffic compared to the previous year, with a total of 10.9 million passengers. Rosaviatsiya, the Russian Federal Air Transport Agency, expects this downturn to linger, with an estimate of almost 2% decline in annual passenger traffic, amounting to around 109.7 million passengers in 2025.
Dmitry Yadvov, the big cheese at Rosaviatsiya, has expressed optimism about the growth potential of air transport, attributing it to the blooming wet leasing business. However, it seems like Ural Airlines’ CEO, Kirill Skuratov, doesn't share the same sentiment. Skuratov anticipates a plateau in air transport for 2025 due to the current high usage of aircraft and the absence of new deliveries.
It's essential to mention that, starting in 2023, the Russian aviation industry began to shift its focus to internal regulations instead of adhering to the protocols of foreign aviation bodies. This change happened in January 2023, when the Russian government granted Russian airlines the right to "cannibalize" aircraft. This meant that essential parts from old aircraft could be dismantled and reinstalled on newer ones, and even non-original spare parts could be used.
Our reports pointed out an eyebrow-raising situation involving Russian Minister of Industry and Trade, Anton Alihanov. By spring 2025, an estimated half-billion dollars' worth of aviation spare parts, procured and paid for by Russia, was reportedly "stuck" abroad. Alihanov highlighted the urgency to unlock these supplies and referred to the recognition of Russian airlines' repairs during the 2022-2025 period in Russian-American negotiations as a significant factor.
Trivia Corner: There were rumblings about Boeing potentially returning to Russia, which sent shockwaves through the economy, leading to an upsurge in the stock market for VSMPO-Avisma, a prominent player in the Russian metalworking industry.
- I'm not sure if the rumors about Boeing returning to Russia are true, but if they are, it could have a significant impact on the finance and transportation sectors, as well as the general news.
- In the aviation industry, the leasing of aircraft along with crew from foreign airlines, known as wet leasing, has become more common due to the policy-and-legislation changes in Russia.
- Aeroflot Group's head honcho, Sergei Alexandrovsky, was one of the proponents for expanding wet leasing to the international market, allowing Russian carriers to utilize foreign-owned aircraft.
- Despite the growth potential of air transport due to the wet leasing business, Ural Airlines’ CEO, Kirill Skuratov, anticipates a plateau in air transport for 2025.
- The Russian aviation industry's focus has shifted to internal regulations starting in 2023, as evidenced by the Russian government's decision to grant Russian airlines the right to cannibalize aircraft.
- There was an unexpected situation involving Russian Minister of Industry and Trade, Anton Alihanov, where an estimated half-billion dollars' worth of aviation spare parts, procured and paid for by Russia, were reportedly stuck abroad, and Alihanov highlighted the urgency to unlock these supplies.
