How Russia is evading sanctions to keep $10 billion worth of seized Boeing and Airbus planes flying

• Russia seized some 500 leased Boeing and Airbus airliners after invading Ukraine.
• But it's hard to keep the planes flying with little access to parts because of sanctions.

Western sanctions against Russia have taken a toll on the country's aviation sector — forcing the country to get creative to keep its planes flying.

Quickly after Russia invaded Ukraine in February 2022, western countries enacted heavy sanctions against Russia to punish Vladimir Putin.

This included closing US, EU, and other allied airspace, preventing planemakers like Boeing and Airbus from sending spare parts to Russia, and stopping countries like Turkey from refueling Russian planes.

The goal was to cut Russia off from the rest of the world.

In response, the Kremlin countered with its own sanctions. It even went as far as to seize some 500 leased western-built airliners — which are worth an estimated $10 billion, according to Reuters.

Despite many allied nations' attempts to reclaim the Russian-seized aircraft, most lessors have had no choice but to forfeit their planes to Russia due to airspace restrictions and pushback from its government and airlines.

And, the volatile nation continues to prove it's more bulletproof than expected. In 2022, Russia received over $14 million worth western-made parts thanks to underground shipments.

But, the illegal import schemes are not the only methods keeping Russia's airlines alive.

Creating a 'Frankenstein fleet'

Once countries stopped sending parts to Russian carriers like Aeroflot and S7 Airlines, the companies were forced to find new suppliers. Some bought second-hand from places like Iran and China, while others "cannibalized" existing jets.

However, robbing spare parts could make the resulting "Frankenstein fleet" worthless outside of Russia's borders, and lessors have since written off the aircraft without much hope they'll ever see them again.

Moreover, the potentially un-airworthy parts could create unnecessary safety risks. Not to mention, once airline inventory gets low, some carrier could encourage pilots and mechanics to purposely overlook certain repairs — similar to what Aeroflot reportedly did earlier this year.

Buying off seized jets using rainy-day money

Since Russia seized hundreds of planes, airplane leasing companies have filed multi-billion dollar insurance claims to recoup lost money — though many are being denied by insurers.

Nevertheless, some lessors may actually get a check directly from the Kremlin.

Last week, Russian media outlet TASS reported the government has allotted 300 billion rubles (about $4 billion) from Russia's National Wealth Fund — essentially its rainy day money — to buy off 80-90 of the foreign-made aircraft it seized from lessors.

Leasing companies in the EU are able to accept the payment thanks to a sanction amendment that says aircraft ownership can be transferred to Russian airlines if a lease agreement was signed prior to Russia's invasion of Ukraine, and only after all of the lease payments have been made.

Airlines including Aeroflot, S7, Ural Airlines, RusLine, and iFly have finalizing agreements, Aerotime Hub reported, but are still waiting on their NWF funds. Russian flag carrier Aeroflot has already received a portion of the money for 10 Boeing 777-300ERs.

According to TASS, Russia's deputy minister of transport Igor Chalik said he is uncertain of when exactly airlines will receive the federal funds, but noted "our task is to complete this program in any case by the end of September."

As of July 1, Russia's NWF stood at $145.6 billion — down from $153.1 billion on June 1, according to country's Ministry of Finance.