NAFA member, David G. Mayer, Partner at Shackelford, Bowen, McKinley & Norton, LLP discusses Russia, sanctions, and business aviation.
The Russian invasion of Ukraine has drawn condemnation and severe sanctions from governments globally, including the U.S., UK, European Union, Canada, and even neutral Switzerland. Many businesses worldwide have pulled back from doing business with, or suspended selling goods and services in, Russia. The sanctions as a whole will almost certainly have serious and perhaps economically devastating consequences for Russia, including in its business aviation segment.
According to WingX, of the 3,860 private jet flights by Russian aircraft this year as of February 21, large-cabin, ultra-long-range, and VIP airliner business jets represented 43 percent of flight operations in the country. As global flight operations continue to rise, strong demand to purchase such jets persists amid the ultra-low inventory of preowned jets available for sale.
Will any of the hundreds of Russian-owned or controlled jets be sellable and sold while sanctions are in effect? For now, it appears so, but the parties may have to traverse a minefield of sanctions and other transaction obstacles to close such purchases.
This article was originally published by AINsight on March 11, 2022.
