R U S S I AThe market for business aviation is
steadily developing in Moscow and
Russia after several years of crisis
and stagnation caused by Western
sanctions and the overall financial
uncertainty in the country.
Prior to 2014, the development of the Russian business
aviation industry correlated with global trends with annual
growth rates in the range of 5-7%, according
to Forbes Russia. However, the
introduction of sanctions wars
between Russia and the
West resulted in an almost
30% drop in the market
according to Forbes
Russia. Sanctions
have affected both the
number of flights and
business jets, purchased
by local citizens.
The situation
stabilized in 2016, when
the business aviation
market in Russia grew
by 5% compared to 2015.
The same growth rates were
observed during the period of
2017-2018, however, despite this,
business aviation activity still remains lower than
the pre-crisis years.
The Business Aviation Center Moscow Sheremetyevo
is one of Russia’s largest FBOs and is located at
Sheremetyevo airport. Oleg Ivanov, corporate affairs director
there says, “While there is no such fall at present, as there
was in 2014, there is also no significant growth either.
“Over the past two years, a gradual increase in the
number of business jets flights in Russia has been
observed. We believe that the Russian market follows the
pan-European trend, with a slight delay of up to two years.
However, at present we do not see any of the conditions
needed for growth.”
The same position is shared by Mikhail Titov, general
director of NaJet, one of the leading Russian online charter
sales systems for business jets. Titov believes that the
Russian market default state is one of swinging between
recession and growth.
The latter, according to Titov, is primarily observed
during periods of major international events in the country,
such as the World Cup 2018, which almost quadrupled
business aviation traffic in Russia times compared to
previous months. Russia’s largest FBOs benefited directly
from the boost. According to Oleg Ivanov, in the case of
Sheremetyevo Center of Business Aviation in Moscow, last
year the total number of business flights in it grew by a
third compared with 2017. The growth was also observed
in the case of empty leg flights, which increased by 37%
compared to 2017. The World Cup provided a 6.5%
64 | BU S INE S S A I R P O R T INT E RNAT I ONA L J U L Y 2 0 1 9
increase in the overall
business traffic of
the airport. At the
same time, the ratio
of international and
domestic flights for the
company last year was
almost equal – 53% and
47% respectively.
Corporate ownership
At present, the Russian business
aviation market is mostly concentrated in
Moscow and St. Petersburg, which account
for about 85% of all business flights in
the country. Among the largest owners
of business aviation fleets in the country
are such companies as Rusjet, Cosmos,
Premier Avia, Gazprom Avia, Ak Bars Aero,
Tulpar Air and some others, most of which
have a presence in Moscow.
Despite the efforts taken by the
Russian government recently to attract
domestic business jets’ owners to register
their aircraft within the country, most
of them still prefer to do it in offshore
territories and some EU states, in lesser
extent. This is mainly because of Russian
legislation in the field of business aviation,
which according to industry experts
significantly complicates the development
of the entire industry. Critics say Russian
aviation authorities are uninterested in
transitioning business jets to domestic
jurisdiction and are reluctant to take on
responsibility for regulating their operation
and are unable to provide a high level of
safety of their flights.
At present the number of business jets
owned by Russian citizens is around
450-500, of which only 60-70 are
Blacklisted
The imposition of Western
sanctions has caused serious
problems for individuals and
companies looking to buy
business jets by Russian citizens,
particularly those who are on
the black list of the EU and US.
Traditionally, a significant
part of business aircrafts were
purchased by Russians using
funds provided by Western
banks. These loans were usually
provided on preferential
terms with low interest rates,
sometimes against the security
of the aircraft itself. However,
the imposition of Western
sanctions resulted in the
destruction of such schemes.
In addition, sanctions have
led to the suspension of a
further servicing of business
jets, owned by Russians by
global aircraft manufacturers.
Such a decision has been
recently taken by Gulfstream in
regard to its aircraft, owned by
Gennady Timchenko, a wellknown
Russian businessman,
who was included in the US
sanctions list. According to some
Russian media reports, the
Gulfstream decision has already
forced Timchenko and other
businessmen like him to sell
their jets.
Other unofficial sources
close to Russian business have
said that other global business
jet manufacturers are refusing
to cooperate with Russian
customers in case of their
presence on any sanctions lists.
“Over the past
two years a gradual
increase in business jet
flights in Russia has
been observed”
Oleg Ivanov, corporate affairs director
of the Sheremetyevo Business
Aviation Center
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