With Russia ranking 10th globally in terms of business jet activity prior to the invasion on Ukraine, the country’s bizav market had been recovering well in recent months. According to WingX MD, Richard Koe, movements were up 25% (accounting for around 4,000 flight sectors) throughout January and February 2022 compared to the same period in 2019. Koe was speaking during a special briefing held at the British Business & General Aviation Association (BBGA) and hosted by The Emerald Network on 10 March.
Around 12% of all ultra-long-range jets flown globally were connecting with Russia, Belarus and the Ukraine, while European exposure to Russian/ Ukrainian business jet activity was about 7%. Vienna had the largest exposure in Europe to business jet flights from Russia/ Ukraine – (11% in 2021) and London Luton Airport had the largest exposure in the UK.
Until a month ago, the forecast was for solid growth in Russia and the global business aviation sector, however there will be “severe repercussions” as a result of Russia’s invasion of Ukraine.
The first week of March saw a dramatic shift in activity with Russia’s business aviation market plunging and its country connections impacted by banned airspace and operating restrictions.
Koe noted that some 469 business aircraft appear to be connected currently to Russia and Ukraine, of which 50 are known to be Russian owned. Around 25% of these aircraft are on Russia’s register, while others are on the Malta, San Marino and Austrian registers.
Amid the current sanctions, Aoife O’Sullivan, a partner in The Air Law Firm and BBGA Chair, warned of the increased need for careful due diligence and “know your customer (KYC) compliance.” She underlined that while “rigorous KYC has always been a requirement under anti-money laundering legislation, the Russian sanctions regime highlights the need for these processes and procedures and why they are so important.”
One of the concerns for operators and airport officials is how to determine whether an aircraft is Russian owned or not especially when many private jets are flying at short notice. On 8 March a Luxembourg-registered Bombardier Global 6500 jet was impounded at Farnborough Airport in the UK having flown from Teterboro Airport in the US. It was believed to have links to a Russian oligarch and is one of the 50 aircraft WingX had identified as Russian owned.
Luxaviation UK CEO, George Galanopoulos expressed his concern for carrying out due diligence especially when fractional ownership can complicate the assessment as he said determining who owns an aircraft “is incumbent on government… we’re not MI6”. There is also concern he said around reclaiming assets that have been grounded in Russia and maintaining Russian-owned aircraft which have been grounded in the UK and elsewhere. A point that was reiterated by Marwan Khalek, Gama Aviation’s CEO who noted that while there’s a moral argument, there’s not a blanket ban on trading with every Russian citizen.
Khalek also said that while some registries are moving fast to deregister aircraft, that’s not necessarily the right step to take. “It needs to be a systematic process and aircraft need to be maintained.”
The Civil Aviation Authority’s Head of Airline Licensing, David Kendrick, agreed that “things are moving at pace in terms of sanction regimes, however we don’t want to see aircraft being left in bits.” He likened the situation to the yachting sector, where crew are allowed to remain on yachts to ensure maintenance.
The best bet Kendrick said is “to apply caution when applying sanction regulations and seek the necessary legal advice. Make sure you work systematically through your decision to accept or refuse an aircraft. So when the UK Border Force or DfT ask the question, you’re able to give a reasonable answer as to why you made the decision you did.”
In terms of overall bizav operations, Osprey Flight Solutions, Matthew Borie, revealed that the lack of access to Russian airspace will continue to impact on the business aviation market. “It will add 1.5 hours flying time from Europe to Beijing, two hours to Tokyo and polar routes could be up to three hours longer,” he said. Alongside increased fuel and operational costs he said this would also incur additional requirements for crew rest and planning. In addition, he noted that as a large land mass Russia was previously considered a low airspace risk. “Using Russian airspace allowed for shorter flying distance and fuel burn, but also less exposure over conflict zones. Operators need to be more dynamic now in their ability to manage the risks of not flying over Russia.”