Global sanctions against Russia are starting to have a ripple effect on all aspects of business aviation.
With the closure of Russian airspace, business aircraft travelling between North America and the Asia-Pacific region must take detours that can add as much as five hours to their flight time. When you add longer flights to surging oil prices, it’s logical to assume fuel surcharges could be on the horizon for fixed rate, fractional and jet card programs.
Aircraft manufacturers have been affected, too. Russia is the world’s largest supplier of titanium, which is commonly used in the production of many types of aircraft, including business jets. Sourcing this material from elsewhere will almost certainly exacerbate supply chain shortages and delays.
As well, Russia’s growing business aviation market and its preference for large cabin business jets could impact a significant number of pending orders for new aircraft in this segment.
If you are looking to buy a private aircraft, your number one priority right now is to confirm that it has no ties to Russia or any Russian interests. An aircraft’s history and prior ownership can be challenging to decipher, hidden behind holding companies, partnerships and dual citizenry. This is where working with a professional aircraft broker really pays off. They know how to dig into the records to uncover true beneficial ownership, establish a clear title and allow buyers to make informed decisions. Without a thorough search, buyers could unwittingly find their newly purchased aircraft potentially seized by the government! Doing your due diligence now can save big headaches down the road.
Some may think there is an opportunity to pick up a ‘great deal’ on an aircraft being dumped by a Russian entity. Given the information mentioned above, and the growing list of sanctions and restrictions, be very wary….
Aside from whole ownership, Russian sanctions can affect other business aviation users, too. In the case of fractional ownership models, it’s possible that if one shareholder in a specific tail number is Russian, that jet may not be able to fly until the Russian interest is removed.
For charter brokers, “know thy client” is taking on new meaning. Customers who hold dual citizenship in Russia and another country are still prohibited from chartering aircraft in much of the world. Those who charter a plane on behalf of Russian friends or business associates will be contravening the sanctions.
Similarly, travellers who charter an aircraft have started asking questions about the beneficial owners of the jet before signing any contracts. Given the fluidity of the global situation, Canadian sanctions can evolve rapidly.
Whether you’re looking to buy or fly a private aircraft, as a first step, be certain to have a professional in your corner able to assist with your path forward.
