Know your customers

Quite apart from the combat, there are big civil aviation implications. Once Russia began its military actions, the European Union, the United States, and virtually all the rest of the Western world imposed sanctions to punish the aggressors. Among them, the U.S. banned operations “to, from, within, or through” any U.S. territorial airspace by Russian airlines and any other airplane that’s on an International Trade Administration list of “aircraft that are owned, chartered, leased, operated or controlled by, for, or for the benefit” of someone on that list.

Why should you care about this rule? Because if an aircraft owner charters or leases an airplane to a Russian entity (which no doubt is disguising its true identity), including individuals—as in Russian oligarchs or their operatives—named on the list, it can be subject to fines, detention, or impoundment.

According to OpsGroup, a website that tracks world travel operations, a Russian-chartered Dassault Falcon 900 registered in the Cayman Islands was detained for a week and fined $18,000 in Canada after arriving from Geneva. In the U.K., a Luxembourg-registered Gulfstream G650 linked to a Russian oil tycoon has been held indefinitely, pending an inquiry. An American airplane leased or charted to a Russian entity on the list could also be subject to this fate.

It’s estimated that there are about 400 to 500 business jets owned by Russian or Russian-involved entities. But of that number, only 100 or so carry Russian registration, and they’re old and way, way beyond their prime. There has been a scramble by Russian-affiliated owners to move or transfer the locations and registrations of their airplanes to neutral nations like the Cayman Islands or Bermuda. This puts brokers at peril, because anyone wanting to sell or buy a jet tainted by Russian involvement can’t legally make a transaction. This, in a time when used, large-cabin inventory is low and demand is high. There’s a new catchphrase among brokers selling big bizjets, according to industry analyst Brian Foley: “Know your customers.”

Meanwhile, Russian authorities have a plan to take the airliners idled at Russian airports and give them Russian registry. That may be a problem, because airlines don’t typically own their airplanes. They’re obtained through leasing companies. The lessors stand to lose a lot. Will insurance cover the loss? Better check the policy’s fine print. Usually there’s an exclusion for damages incurred as a result of war. Anyway, manufacturers aren’t providing parts or service to these airplanes, so their airworthiness may soon be jeopardized.

There’s more: Russian and Ukrainian airspace should be avoided. Russian GPS jamming could well trick the unwary into straying into active military areas, much the way they spoofed navigation signals to tempt airplanes off-course during the Berlin airlift.

In sum, the Russian invasion of Ukraine has ramifications far beyond the massive humanitarian disaster. Here’s hoping that by the time you read this the situation will have reversed.

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