Foreign aircraft lessors seeking to recover some $10 billion worth of planes from Russia were dealt a new blow Monday when President Vladimir Putin signed a law clearing the country’s airlines to fly the planes domestically.
Sanctions and reciprocal airspace closures in response to Russia’s invasion of Ukraine last month have cut off the country’s air travel market. Boeing and Airbus have said they will no longer supply parts to its airlines. That could force carriers to cannibalize other jets for parts.
There are some 728 Western-built aircraft in the country’s airlines’ fleets, 515 of them leased by foreign lessors, according to Jefferies. Under European Union sanctions, aircraft lessors — some of which are based in EU member Ireland — have until March 28 to recover the planes.
Under the new rules set Monday, the Kremlin will allow the country to provide airworthiness certificates to the planes and register them in Russia, according to state news agency Tass. The law was in the works last week.
“There’s an occasional nightmare but the idea of an entire aviation market being taken offline and flouting international laws, that’s new,” said Richard Aboulafia, managing director of aviation consulting firm AeroDynamic Advisory.
Aeroflot and S7, two of Russia’s biggest airlines, last week stopped flying internationally. Flights abroad could risk lessors moving to repossess the planes.
This article originally appeared on CNBC