TrueValueMetrics ... Impact Accounting for the 21st Century

Date: 2025-08-20 Page is: DBtxt003.php txt00027215

AVIATION NEWS HOW RUSSIA IS COPING Mentour Now!: STILL Airborne! The Shady Deals Keeping Russian Airlines in the Sky Original article: https://www.youtube.com/watch?v=xflffWWrsHs Peter Burgess COMMENTARY Peter Burgess
STILL Airborne! The Shady Deals Keeping Russian Airlines in the Sky Mentour Now! Jul 29, 2024 395K subscribers ... 324,270 views ... 14K likes Mentour Now! tagged products below. Learn more Two and a half years since the West imposed sanctions against Russia for their rapid escalation of its war with Ukraine, Aeroflot and other airlines are still managing to stay airborne. How is this possible? In today’s video, we’ll uncover what’s going on with the 400 Western aircraft stolen by Russia and the other ways that its aviation industry is working around Western sanctions to access crucial supplies. If you want to support the work I do on the channel, join my Patreon crew and get awesome perks and help me move the channel forward! 👉🏻 / mentourpilot Our Connections: 👉🏻 Exclusive Mentour Merch: https://mentour-crew.creator-spring.c... 👉🏻 Our other channel: / mentournow 👉🏻 Amazon: https://www.amazon.com/shop/mentourpilot 👉🏻 BOSE Aviation: https://boseaviation-emea.aero/headsets Social: 👉🏻 Facebook: / mentourpilot 👉🏻 Instagram: / mentour_pilot 👉🏻 Twitter: / mentourpilot 👉🏻 Discord server: / discord Download the FREE Mentour Aviation app for all the latest aviation content 👉🏻 https://www.mentourpilot.com/apps/ Below you will find the links to videos and sources used in this episode. SOURCES • Where Russia’s war with Ukraine stand... • How effective are sanctions on Russia? • Меры по профилактике коронавируса в А... • Sanctions will erode Russia’s economy... • Конкурс «Лучший по профессии» (департ... • Аэрофлот вводит в эксплуатацию новый ... • Russia bans entry to 52 Irish officials • Aviation Leasing company Aercap broug... • Money Talks: Prospering aviation busi... • Meet Our People - Marie Louise Heavey... • Russia may refuse to return leased ai... • Техническое обслуживание воздушных су... • «Лучший по профессии» (ДНОП) • Aeroflot A330 repair in Iran • AVIATION MAINTENANCE TECHNICIAN DAY -... • Volga-Dnepr - 30th years (p.1) • Ural Airlines. Профессия - пилот • ANDREA DEL VECCHIO - NOVAPORT - RIMIN... • Iran Air's First Airbus A330-200, Bef... v • Airbus A320neo S7 Airlines • Kazakhstan plane crash: death toll rises • AWESOME! taxi and take-off of Mahan a... • В преддверии празднования 75-й годовщ... • Russia: Ural Airlines plane emergency... • SaM146 engines in the world's coldest... • Rusia evalúa reiniciar la producción... • New US Sanctions Target Russian Suppl... #Mentourpilot #pilot #aircraft Transcript 0:00 - So, what's going on in Russian aviation? Are things over there collapsing as I predicted a year ago, or have they returned to business as usual after figuring out ways to work around the Western sanctions? Well, today I'm going to have a look at some new developments around those aircraft that Russia took over, and we'll also have a further look at the effects that this situation is having on aviation, both inside and outside of Russia. Stay tuned. (playful chime) It has now been two and a half years since Russia's rapid escalation of its attack on Ukraine, and the invasion obviously led to strong reactions by a majority of the West, with many imposing strong sanctions as a result. - With massive and targeted sanctions. - This included actions towards the country's airline industry, and among other things, it had, as an effect, that lessor-owned aircraft in Russia were effectively stolen by the airlines who operated them. So how is that going then? 1:00 Well, in June this year, the world of aviation saw an escalation of a pretty unusual standoff, but not the military one this time. Instead, the battle stood between multiple aircraft-leasing companies and their insurers. It took place in Ireland, and was one of many such legal cases around the world, involving aircraft that the Russian airlines had refused to return to their owners. But what exactly made this trial unusual, you might ask? Well, how about the fact that the Irish court authorities had to set up a temporary makeshift court to make it possible to even hear this case? The reason for that was that this was the biggest ever legal case to be heard in Ireland, at least in terms of the number of lawyers present. Up to 180 lawyers was and is able to attend these hearings every day, with even more of them sometimes taking part via video links. Now, the reason for these hordes of lawyers is that this case involved half a dozen lessors, over a dozen insurers contracted by the lessors themselves, 2:01 and possibly a lot more insurers based in Russia contracted by Russian airlines. So that's a lot of lawyers, meaning that this case might take around seven months to reach its conclusion. The stakes are obviously quite high, about €2.5 billion, or US$2.7 billion, and that only covers about 80 of the over 400 Western aircraft that were stranded in Russia when the sanctions first started. The reason this trial is taking place in Ireland is because most of the world's biggest aircraft lessors are based there, but this isn't the only such trial currently in the works. Other lessors, including AerCap, who's the biggest lessor in the world, is holding a separate trial in the UK, and that one will start next October, with more leasing companies pursuing their insurance claims elsewhere, including in the United States. Now, if you think that I'm going to analyse the legal arguments of the many sides in this court standoff, well (chuckles) that won't happen. 3:01 Not since this case requires 180 lawyers to argue, but we can have at least a little look at some of the arguments that are being thrown around. Obviously, the leasing companies are unable to get their planes back from Russia, which is why they're demanding a payout from their insurers. But from the insurers' side, a lot of them are saying that there hasn't actually been a physical loss of an aircraft yet in this case. They're arguing that maybe some of these aircraft can still be repossessed and therefore returned. Well, another strategy that they're pursuing is that it was actually the lessors who decided to end the leasing agreement in the first place. In the end, though, this might come down to whose actions actually caused the problem in the first place. Was it the Russians and their escalating invasion of Ukraine, or was it the Western governments who actually imposed the sanctions? Or was it the lessors and the way they reacted to all of this, and also, are the stuck jets subject to a war risk or a broader all-risk insurance policy? 4:04 The leasing companies are accusing 4:06 the insurance companies of not being able 4:07 to agree on the meaning of their own policies, 4:10 while the insurers accuse the lessors 4:12 of not being sure of when the loss 4:14 of the aircraft actually happened. 4:17 Again, that's the fight over 80 jets 4:19 and around $2.7 billion in Ireland and even more in the UK. 4:23 But meanwhile, several lessors have instead made settlements 4:26 with Russia for some of the aircraft that are stuck there. 4:29 Typically, they've done that through Russian insurers, 4:31 who have then paid and passed 4:33 on the ownership of those aircraft to the Russian airlines. 4:37 The exact number of these planes are unclear, 4:39 because not all of the terms of these agreements are public, 4:43 but it's probably over 100, 4:45 with a value of again around $2.7 billion. 4:49 But since the total number 4:50 of aircraft that got stuck there was around 400, 4:53 that means that even if the court cases in Ireland 4:55 and the UK are concluded, 4:57 over half of the aircraft originally leased 4:59 to Russian airlines remain technically stolen. 5:03 But planes are not just stuck in Russia, 5:06 others also got stuck inside of Ukraine 5:08 when the Russians invaded. 5:10 Now a couple of those had since managed to fly out of there, 5:13 but as I record this, 29 of them are still stuck 5:16 and obviously, Ukraine's airspace 5:18 remains completely closed for now. 5:21 A number of those aircraft were also leased 5:23 and recently there was another court case 5:25 in London about those, but it didn't go anywhere. 5:29 The judge presiding over that court case ruled that 5:32 unlike the ownership disputes of the stolen jets, 5:34 the cases of the planes that were stuck in Ukraine 5:37 should be heard by courts in Ukraine. 5:41 That was not what the leasing companies 5:43 who owns those aircraft wanted to hear. 5:45 Because obviously the people of Ukraine continues 5:48 to have far more serious and urgent things to worry about 5:51 than the arguments of lawyers 5:52 regarding aircraft lessors and insurers. 5:55 So what that really means is that any decisions 5:58 on the fate of those airliners 5:59 will have to wait for a while yet. 6:02 But on a broader level, a good news story for the industry 6:06 is that despite the lawyers' standoffs, 6:07 leasing companies and insurers don't appear 6:10 to be in any immediate financial trouble because of this. 6:14 During the early stages of this ugly situation, 6:16 some industry insiders feared 6:18 that this would cause a collapse 6:20 of the whole leasing industry, 6:21 which in turn would create huge problems 6:24 for the entire world of commercial aviation 6:27 since over half of the world's airliners 6:29 belong to those leasing companies. 6:32 But that happily doesn't seem to be the case. 6:35 Anyway, that's all about the effects of Russia's invasion 6:38 outside of Russia. 6:39 But how about the development inside of Russia itself? 6:43 Well, that comes after this. 6:45 With geopolitical tensions affecting the aviation industry, 6:48 there is now an increasing need 6:49 to really understand aviation data and predictions. 6:53 And that's why I am so proud to tell you 6:55 about today's sponsor Brilliant 6:57 and the new course, Predicting with Probability. 7:01 Brilliant is my own all-time favorite learning platform 7:04 and it's perfect for anyone looking 7:06 to hone their skills in STEM subjects like data analysis, 7:10 math, programming, physics and AI. 7:13 The platform can be used by anyone at any age, 7:16 so it's a great way to keep your own 7:17 and your children's brains active 7:19 and curious over the summer holidays. 7:22 And the course that I just mentioned, 7:24 Predicting with Probability, 7:26 provides hands-on experience extracting predictions 7:29 about the future weather and airline data. 7:32 This means that if you try it out, 7:33 you will learn how to work with probability mass functions, 7:36 joint and conditional probabilities 7:39 as well as the Bayes' theorem. 7:41 So if you wanna become a better thinker, 7:43 improve your STEM skills 7:45 and have fun while you do, go to brilliant.org/mentournow. 7:49 This will give you 30 days completely free access 7:52 to Brilliant to try it out and then a 20% discount 7:55 on their annual subscription, which is truly awesome. 7:58 I love being able to provide discounts 8:00 on products who truly improve people's lives 8:02 and Brilliant is definitely one of them. 8:05 Thank you Brilliant. Now, let's continue. 8:08 In April last year, Aeroflot announced 8:10 that they had decided to send one 8:11 of their Airbus A330s to Iran for maintenance work. 8:16 That aircraft was then flown to Tehran, 8:18 where the Iranian carrier Mahan Air has its repair base 8:21 and it now seems that this was done as kind of a trial step. 8:25 Aeroflot wanted the Iranian company 8:27 to service the landing gear struts 8:29 of this Airbus A330 and it later emerged 8:31 that Aeroflot wasn't really satisfied with the job, 8:34 but I'll get back to that soon. 8:37 Since then we've also seen more news coming out of Russia 8:39 and its airline fleet and one of those 8:42 is that Western countries continue 8:43 to impose new sanctions on Russian airlines and entities. 8:48 These new sanctions 8:48 are primarily aimed at Russian entities 8:50 who have played an active role in the war against Ukraine 8:53 by either moving people or material. 8:56 Companies included are 8:57 for example the cargo operator Volga-Dnepr, 8:59 who operates a fleet of Antonov AN-124 freighters, 9:03 as well as Ural Airlines, 9:04 an all-Airbus narrow-body airline 9:06 which I actually just featured over 9:08 on the Mentour Pilot Channel. 9:09 You should definitely check that out. 9:11 The airport management company, Novaport Holding, 9:13 has also been sanctioned by the European Union 9:16 because some of the 23 airports it operates 9:19 have a joint civilian and military role. 9:22 That said, how much these new sanctions 9:24 will actually impact beyond the sanctions already in place 9:27 is a little bit up for debate. 9:29 But other broader sanctions 9:30 are aimed at limiting Russia's access to technology 9:33 that could have a military purpose 9:36 and a lot of that type of technology 9:37 also had some overlap with commercial aviation. 9:41 Otherwise, a lot of the news regarding aircraft operations 9:44 in Russia seems to be quite positive, 9:47 especially if you're a Russian airline boss. 9:50 If you're a crew or a passenger, 9:51 well then things get a little bit more complicated, 9:54 so let's have a little bit of a look at that. 9:57 The main good news story for Russian airlines 9:59 is that the total number of flight hours 10:01 of their fleet have now recovered 10:03 to pre-2022 levels, which is surprising considering 10:07 that they have no access 10:08 to official channels for aircraft spare parts. 10:11 In a recent statement, Airbus confirmed 10:14 that there is no legal way that genuine aircraft parts, 10:17 documentation or services can get to Russian carriers. 10:21 So the fact that Russian airlines can operate western planes 10:23 under these conditions is quite impressive. 10:26 Especially when we consider that before 2022, 10:29 Aeroflot and many of its subsidiaries relied 10:32 on maintenance and repair centres in Germany and Hong Kong. 10:36 Bear in mind that even though China 10:38 hasn't imposed any direct sanctions on Russia, 10:40 its maintenance centres still stopped servicing 10:43 all Russian aircraft for fear of suffering sanctions themselves 10:46 and therefore, losing access to Boeing and Airbus parts. 10:50 So how are the Russian airlines actually doing this? 10:54 The quick answer is with money, 10:57 a crazy amount of money. 10:59 And to understand that, let's go back to Iran for a moment. 11:03 You see, the possibility of getting maintenance done 11:05 for its planes in Iran was only one 11:07 of the ideas that Aeroflot 11:09 and other Russian carriers were exploring. 11:12 Another idea, a much more promising one for the long run, 11:14 has to do with figuring out how Iran 11:17 has been maintaining and operating its own fleet 11:19 of aircraft and then just copying that. 11:23 You see, Iran has been under international sanctions 11:25 for a very long time by now, 11:27 but this doesn't mean that they haven't been able 11:29 to source parts for their aircraft. 11:32 How? 11:33 Well, a recent Financial Times article 11:35 explored this parts-smuggling operation quite thoroughly. 11:39 And in essence, it involves a variety 11:42 of relatively small companies 11:44 many of them based in the United Arab Emirates, 11:46 but also in China, the Maldives and Turkey. 11:50 That's not entirely surprising. 11:51 A few months ago, I made a video looking 11:53 at how Aeroflot was able to operate several of their aircraft 11:56 with one inoperative brake 11:58 while they were waiting for more parts to come. 12:01 And now we know from where those parts are coming. 12:05 You see, these companies have specialized in, let's say, 12:07 repackaging vital aircraft components 12:10 and then shipping them around the world 12:12 in very creative ways. 12:14 For example, Russia's S7, also known as Siberian Airlines, 12:17 has recently been getting shipments 12:19 of Air Data Inertial Reference Units, or ADIRUs, 12:23 packed inside passenger luggage. 12:26 We know about this because these items, 11 of them in total, 12:29 appeared in a customs report in Moscow's Vnukovo Airport, 12:32 and each ADIRU apparently weighed 11 kilos, 12:36 so they had to be shipped separately. 12:39 Now in the case of Iran, it turns out that these companies 12:42 have been able to sometimes transport 12:43 and sell more than just aircraft components. 12:46 Think more entire airplanes. 12:49 Yeah, back in 2016, a UAE-based company 12:53 called Turboshaft FZE suddenly bought two Airbus A340s 12:57 from the government of Greece. 12:59 These jets had previously belonged to Olympic Airways, 13:01 but they were then taken out of service 13:03 and parked in Athens for over seven years. 13:06 Eventually, the Greek state, 13:08 which the aircraft belonged to at the time, 13:09 sold them to Turboshaft basically as scrap. 13:13 But the company somehow managed to get them airworthy, 13:15 and in February 2017, the two jets took off, 13:19 supposedly on flights over to Kazakhstan, 13:21 where they were supposed to join the fleet of Bek Air. 13:25 Now, that's an airline whose name 13:26 has already been implicated 13:28 in a number of suspicious deals 13:30 before the company finally folded back in 2018. 13:33 But in any case, the two Airbus A340s never got 13:37 to their intended destinations. 13:39 Because as they were flying over Iran, 13:42 they suddenly ended up diverting to Tehran instead. 13:46 One of them was later sold on to Syrian air, 13:49 and the other one still flies 13:50 for Iran's Mahan Air to this day. 13:53 So I guess that's one way of doing it. 13:56 More recently, Iran also got four more Airbus A340s 13:59 in more or less the same way, 14:01 and this time, they were ex-Turkish Airlines aircraft 14:04 flying from South Africa. 14:05 And last February, they got two more from Lithuania. 14:09 Now, tricks like that might work for Iran, 14:11 but Russia's aviation industry 14:13 is many times larger and can't really be served 14:16 by one or two old unwanted Airbus A340s 14:19 every once in a while. 14:21 Although some similar-sounding stories 14:23 are actually starting to come out of Russia too. 14:25 Recently, a brand new Airbus A320neo, 14:28 that was bought before the 2022 sanctions as a private jet 14:31 somehow made its way into Russia, 14:34 after first changing registration multiple times. 14:38 But remember that company, Turboshaft FZE, 14:41 who acquired the first two of those Airbus A340s for Iran? 14:46 Well, turns out that's the same company 14:48 that packaged those 11 ADIRUs 14:50 in suitcases and shipped them to Russia's Siberian Airlines. 14:54 These companies actually have a quite interesting history. 14:56 They are owned by Russian nationals 14:58 and when they first started 15:00 doing business over a decade ago, 15:02 they specialized in selling used parts 15:04 for old Soviet aircraft from Russia 15:06 and then shipped those parts to all over the world. 15:09 So you could say that the Russia-Ukraine war 15:12 and the sanctions that then followed made this 15:14 and also some other similar companies 15:16 reverse the flow of parts and also greatly increase 15:20 the volume of their operations. 15:22 But this is where this story starts to get a little bit ugly. 15:26 First of all, as I've pointed out 15:28 in multiple previous videos, 15:30 whenever you are dealing with parts from shady sources, 15:34 you don't actually know what you are getting. 15:37 Parts don't have to be complete fakes to be dangerous, 15:40 they could also be components 15:41 that were made by proper manufacturers 15:44 but which have already reached 15:45 their flight-hour limit or other limits 15:47 and should therefore be scrapped. 15:49 There are international safeguards 15:51 who today allow companies to track aircraft parts, 15:53 but when your parts arrive repackaged in suitcases, 15:56 do you really know their provenance 15:58 and do you trust the paperwork they come with? 16:02 When Turboshaft was still 16:03 selling old Soviet aircraft components, 16:05 some of their customers weren't always really happy 16:08 with the quality of those parts. 16:10 So new customers should probably keep 16:13 a healthy amount of skepticism as well here. 16:16 To summarize, if Russia starts copying Iran's way 16:19 of getting aircraft parts, 16:21 well then they need to be very careful 16:23 to not also start copying Iran's aviation safety record. 16:27 Second, getting anything 16:28 from a black market source 16:30 generally involves a substantial markup. 16:33 Whatever it is, it will be more expensive 16:35 than if it had come from the right source 16:37 and as it turns out, aircraft parts 16:39 are no exception to this. 16:42 And that's where we start getting 16:43 into the crazy amount of money bit of this story. 16:47 Figuring out the average markup 16:48 for parts is difficult without knowing 16:50 the conditions of those parts 16:52 or if those values declared to customers 16:55 are even real or not, 16:56 but it looks like Russian airlines are buying some 16:59 of these suitcase-packed ADIRUs for $120,000 each, 17:04 which is a 100% markup 17:06 on the legal parts who normally sells for around 50-70,000. 17:11 And traffic collision and avoidance systems, 17:13 or TCAS, are also selling in Russia 17:16 for over $100,000 American 17:18 instead of the normal 15-25,000. 17:22 The only good news in this affair 17:23 for the Russian airlines is that they might not have 17:25 to foot the bill themselves for these price hikes. 17:29 You see, just weeks after the imposition of Western sanctions, 17:32 the Russian state set aside €2.5 billion, 17:36 or about $2.7 billion, 17:38 specifically for sanction-related additional expenses. 17:43 And while some of this money 17:44 was sent to buy Western aircraft from lessors, 17:48 not all of it was. 17:50 So when you put all of these factors together, 17:52 you can maybe see how Russia's aviation industry 17:55 has been able to limp back 17:56 to its pre-war number of flight hours. 17:59 But it's not clear if all Russian airlines 18:01 are actually getting access 18:02 to these shady parts we're talking about. 18:05 And what do I mean by that? 18:06 Well, an indication might be that 18:08 after the crew of a Ural Airlines Airbus A320 18:11 made an emergency landing 18:12 in a muddy field in Siberia recently, 18:15 the airline seriously considered flying it out 18:18 from that same muddy field. 18:20 In the end it looks like those plans were abandoned 18:22 because the field didn't get hard enough during the winter, 18:25 but seriously considering such a rescue plan 18:28 probably wouldn't have been done 18:29 if normal sources of aircraft and parts were still available. 18:33 Other reports indicate that airlines in Russia 18:35 are now no longer needing to rely 18:37 on the supplier of spare engines, 18:39 many of whom actually also belong to lessors, by the way. 18:43 Instead the airlines are slowly getting 18:45 the ability to service and repair their engines themselves 18:47 and then put them back into service. 18:50 But one fact is impossible to get around. 18:53 Even with these alternative parts suppliers 18:56 and the homemade engine service centers, 18:59 Russia's airlines are now having to make do 19:01 as best as they can with a lot fewer components coming 19:04 into the country than it did before. 19:06 And I mean a lot fewer. 19:09 Before 2022, Siberian Airlines was reportedly importing 19:13 around $100 million worth of aircraft spare parts per month. 19:17 And today that number is under 20 million. 19:21 And we don't even know if those 20 millions include 19:23 the obligatory markup 19:25 that their new friendly smugglers are asking for. 19:29 So as you can imagine, flying aircraft for the same amount 19:31 of hours but with only a fraction 19:33 of the regular amount of spare parts 19:35 has some disturbing implications. 19:38 For example, there are 19:39 now some reports that filters for the Sukhoi Superjet, 19:42 who were made in France 19:43 and should be replaced whenever they become clogged, 19:46 are now instead being removed, 19:48 cleaned and then reused by their Russian owner airlines. 19:52 Now that story didn't specify 19:54 what type of filters they're talking about, 19:56 but I really hope that they're not fuel filters. 20:00 You see the core of the PowerJet's SaM146 engine for the Superjet is made in France by Safran, so it's not impossible that it is those filters that they're actually talking about. Anyway, Rosaviatsia, Russia's aviation authority, has also been handing out approvals for more and more Russian companies to allow them to start making copies of western aircraft components. At the same time, Rosaviatsia has also stopped publishing detailed information on the airlines that it's monitoring, including the number of each aircraft type that these airlines are operating. That's not really a move that inspires a lot of confidence. Finally, perhaps the most telling development about the state of Russian aviation is that two and a half years after the sanctions, there is no real news regarding new Russian aircraft development and production. From what we heard in 2022 and 2023, Russia's long-term solution for replacing those western jets was to build hundreds of fully Russian Superjets, MC-21s and perhaps even some Tupolev-214s. 21:04 But the Superjet and the MC-21 both rely on western part for avionics and well, just about everything else apart from the airframe. So replacing all of those parts with Russian ones would amount to a complete redesign of the aircraft, as I also explained in previous videos. In the end, this is all academic though. Because despite bold statements about the rebirth of the Russian aircraft manufacturing industry, it seems that the companies there are more focused on figuring out ways to continue using western aircraft, rather than building new ones themselves. But that obviously can't go on forever. Russian operators obviously know that. Even with their experience in engine repairs and part swaps, Russian maintenance centers just don't have the necessary infrastructure to perform heavy maintenance on their Boeings and Airbuses. Without that ability, all of the suitcase parts in the world won't keep those planes in service for more than a few years, which means that fully-Russified versions 22:01 of those Russian jets need to be certified and in production by then. What do you think? What will Russia's commercial aviation look like in another year? Let me know in the comments below. My team and I spend loads of time painstakingly researching and making these videos, and if you like what we do and want to support it, the best way of doing that is by joining my Patreon crew by clicking on the links here below. We have regular Zoom hangouts together, they get to preview my content and really take part in the work that we do, so I would love to see you there. Have an absolutely fantastic day wherever you are, and I'll see you next time. Bye bye!

SITE COUNT