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Russia to ‘keep’ leased planes, ‘pay’ for them in worthless rubles

Russia to 'keep' leased planes, 'pay' for them in worthless rubles
Russia to 'keep' leased planes, 'pay' for them in worthless rubles
Written by Harry Johnson

Russia’s Transport Ministry published a new document on the official portal today, that establishes a new procedure for the execution of lease agreements for foreign aircraft and aircraft engines amid the economic sanctions imposed on Russia for its aggression against Ukraine.

The document suggests that Russian authorities may authorize the country’s airlines, including national flag carrier Aeroflot, to retain aircraft leased from foreign firms and pay for them in the national currency, that is currently in a freefall and is more or less worthless.

According to the draft, if the contract between a Russian airline and a foreign aircraft lessor is terminated at the request of the latter, including ahead of schedule, Russian government commission on import substitution is to decide whether the aircraft should be returned. In the absence of such a decision, airlines can continue to use the aircraft until the end of the initial term of the lease contract.

In addition, the document states that if the contract was executed in 2022, settlements between the aircraft owner and the airline are to be carried out in Russia’s national currency, the ruble.

An explanatory note to the document states that the draft resolution has already been approved by Russia’s Ministry of Finance, the Ministry of Economic Development, and the Ministry of Justice. The proposed regulation would apply to contracts concluded before February 24, 2022.

The proposal comes after the EU imposed a ban on selling and leasing planes to Russian airlines last month, as part of a package of restrictions placed on Russia amid Moscow’s ongoing war of aggression in Ukraine.

EU gave leasing companies until March 28 to end current rental contracts in Russia. Reports then emerged that Russian authorities were discussing ‘nationalizing’ Airbus and Boeing planes, which constitute the majority of Russia’s civilian aircraft fleet.

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About the author

Harry Johnson

Harry Johnson has been the assignment editor for eTurboNews for mroe than 20 years. He lives in Honolulu, Hawaii, and is originally from Europe. He enjoys writing and covering the news.

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