EU Sanctions Against Russia: Possible Effects on Aircraft Sector

Against the background of recent European Union (EU) sanctions targeting Russian airline Dobrolet, this note provides a general overview of relevant issues – especially in the context of the aircraft sector.

I. Background -

On 30 July 2014, the EU expanded its sanctions measures against Russia by adding 8 persons and 3 entities to the so-called asset freeze list. Among the listed entities was Russian airline Dobrolet (or Dobrolyot), a low-cost Aeroflot subsidiary operating flights between Moscow and Crimea. It was reported in the press that as a consequence of this asset freeze, Dobrolet’s existing lease agreement for Boeing 737-800 planes was cancelled and Dobrolet was forced to suspend all flights.

As of today, Dobrolet is the only Russian airline subject to an EU asset freeze. While it is impossible to predict which EU sanctions might be imposed in the future, the fact that the EU has imposed sanctions against one Russian airline shows that there is a possibility of future sanctions affecting the sector. The sanctions now applicable to Dobrolet show there is political agreement among the 28 EU Member States that it would not be inappropriate to sanction airlines operating in Crimea. Hence the reason for the present note, notably given that Western companies are involved in leasing aircraft to Russian airlines.

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