Articles like these are a good example that while Russia often tries to downplay or outright deny the sanctions have any effect on them, they do work. This is only one specific example with a specific plane model, but their whole airline industry is facing similar issues on many fronts. Many repairs that used to be business as usual are now either prohibitively expensive or downright impossible due to the sanctions. Similar problems exist across a wide range of industries in Russia. There's a reason why they closed off their stock market, they can't afford to let the full impact be visible.
The point of modern sanctions is not that it makes import impossible (look at Russian circumvention for dual-use military technologies), but that it makes import at whole-economy scale more expensive and unreliable.
And ultimately that's what imposes economic costs.
It'll be curious how much of the gap is filled by substitute Chinese goods. (E.g. the domestic CFM-alternative engine projects [0])
With the wrinkle that Russia and China are united by their geopolitical opponents more than their friendship, and Xi doesn't seem thrilled about shackling the Chinese economy to the consequences of Russian war.
Massive difference between airliners and aircraft. Russia has not shown itself capable of mass manufacturing airliners. (Or even advanced aircraft for that matter.)
That said, as a petro state, they’re fine running inefficient engines across their skies.
The SSJ-100 contains far more important systems (not parts) [1] than e.g. Embraer’s regional jets. It was designed with consultation from Boeing, including throughout manufacturing. Russia’s indigenous jets are terrible, and there is no reason to expect them to improve, they can’t compete against the Chinese for the anti-Western market.
To be fair to Sukhoi, this is how Boeing builds planes. If America were sanctioned by its allies, I’d similarly argue that Boeing, too, is incapable of mass manufacturing airliners.
Dear Sedan Baklazhan, it is not the first time I see you posting comments on Russia-related threads, your nickname is pretty memorable. Why do you spend your time and emotions doing this? Is this worthwhile? Who you are is not where you are from.
The sanctions don't have a goal. So anyone can say anything. Besides Air Transport is a small ass part of GDP. Their MIL complex is on over drive, more than compensating for whatever hits the other sectors are taking. Their GDP is growing faster that all other major Western Economies. The US & EU are not serious about winning this war, mostly because they don't have confidence in themselves that they can.
> Their GDP is growing faster that all other major Western Economies
Growth that depends entirely on government spending can only last so long... First you blow all your reserves, then if/when you start printing money and hyperinflation kicks in even if the nominal GDP in the domestic currency appears to be rising, real GDP falls fast.
Because Russia's essentially a petro-state, they had sizable cash reserves with which to prop up their economy. Now you can see with the price of the Ruble that they've run out of the will to prop it up using foreign reserves (probably running low on foreign currency) and most estimates of their economic growth is that it'll stall or they'll see a recession for 2024 and beyond.
> The US & EU are not serious about winning this war, mostly because they don't have confidence in themselves that they can.
You're right that the west isn't serious. It's not that they don't think we can, it's that they're afraid the slightest hit to our living standards will erode support. While they might be right, we're sleepwalking into an even worse scenario...
> This is correct. The Russian economy is doing fine.
The Russian economy is doing "mixed". It's a war economy which can be propped up for quite a while but it has significant structural issues that will take years to repair. The country won't fail, but it will further struggle because of the decisions made my leadership.
I find this general attitude of "Russia has no issues" that are going around on the internet quite confusing if pretty much every economic indicator says otherwise. Let alone the fact that a meaningful part of the working population is fighting or left the country rather than engaging in the economy.
> country won't fail, but it will further struggle because of the decisions made my leadership
It’s removing itself as a conventional threat to Europe for generations to come. And as much as Beijing is a rival to Washington, they’re rational in a way Moscow is not. Russia as a Chinese suzerainty is probably a better world configuration than Russia as a sovereign regional power.
> find this general attitude of "Russia has no issues" that are going around on the internet quite confusing if pretty much every economic indicator says otherwise
The sanctions’ goal was to cripple the Russian economy in a militarily-relevant way. On this they failed and that has been widely discussed. Folks might be extrapolating that discussion inappropriately.
What? The EU and US aren’t in the war at all. We’re almost 3 years into Russia being unable to conquer a country 1/3 their size right on their border.
On top of all the damage done to them, and their advanced EW capabilities that have been captured and sent for analysis in the US, and exact knowledge of things like Kinzhal, the lost flag ships and submarine, the modern sea drones - this war is a disaster for Russia.
The US and EU aren’t even involved and Ukraine is holding its ground. Russia is doing so poorly that they’re not even considered a threat anymore in the West.
Their “GDP” numbers belie systemic economic weaknesses that show up when they have to BARTER for food. That’s how worthless their currency is.
Russia is basically completely pathetic at this point - they can terrorize countries that share a land border with them but can’t project power even past Ukraine.
They had to import starving North Koreans with antique shells and Iranian RC toys. Some superpower.
The US and EU don’t care about the war in the same way someone with a Ferrari doesn’t have to race someone with a Honda Civic - because they’re not a threat. Let the person in the Honda rev their engine and scream that they’d win - they’re just stupid. They look stupid.
They’ve lost what, 500k soldiers? They’re so much weaker than the Soviet Union it’s laughable.
The rest of the world disrespects them so much that they had $300B worth of Russian assets outside their country - and they were all seized. That was half their famed “sanction proofing”! What are they going to do about it? Nothing.
They have “hot” GDP based on faux demand for wartime goods - as they trade Rubles for oranges because nobody wants their currency. Does that sound viable to you? Laughable.
Foreigners are not allowed to sell on the Russian stock market from the Russian side [0] and they're generally not allowed to buy from the sanctions side. This means that as a foreign investor you're barred from trading in any useful meaning of the word. Buy and hold in the hopes that you might be able to maybe some day sell, whether that's in a year, ten years, or a hundred, is not really a viable strategy. That's also the reason why investment and asset management companies of all sizes are trying to find their exits from the Russian market, see for example Van Eck [1], just the latest addition in a long line of many:
> Regulatory and market conditions do not currently permit the Funds to conduct transactions in the local Russian market.
The post you are quoting did not say they closed the stock market. They said they “closed off” the stock market, which implies denying access to certain classes of investors.
That said, I’m not finding anything about Russia prohibiting foreign investment, but I am finding a lot about sanctions prohibiting dollar and Euro investment in Russia.
“Closed off” means “restricted access to”. It doesn’t mean “closed”. I have no idea what restrictions the parent was referring to, but they weren’t saying that the stock market shut down.
As a "westerner" you will need a Russian residence permit I think to trade. I at least would not know how you can actually buy something in MOEX as someone based in Europe.
Good point. Worth noting that the Russian newspaper reporting this, Kommersant, is the most liberal/independent of the three business dailies in the country and is sort of the Babylon Bee of Russia, if the BB wasn’t satire: it spells its name with pre-Revolution Cyrillic and uses creative neologisms, wordplay, metaphors, and legally imposed euphemisms in its stories to maintain a degree of independence in periods of severe state censorship
This will be Europe’s first post-War test of security integrity.
My suspicion is it will fail—that Europe as a single force, versus collection of countries crowded on a continent, is an American invention, and without American strength will dissolve divided. But my hope is it will succeed.
There's an argument that the US did everything to prevent Europe from coalescing into a single force and only want Europe to be a single market, not much more, for instance by convincing Eastern European countries to trust their protective umbrella rather than the French-German domination.
> the US did everything to prevent Europe from coalescing into a single force and only want Europe to be a single market, not much more
I mean yes, we did. Western Europe was unifying under Berlin in the 1940s.
> by convincing Eastern European countries to trust their protective umbrella rather than the French-German domination
Militarily speaking, modern Germany is irrelevant. (Partly due to how it’s been managed post-War.) Especially to Eastern Europe, whose security concerns require a nuclear umbrella.
I guess we don’t say that USA had “sanctions” against the Soviet Union, but there was a monumental improvement in economic relations after the Soviet Union collapsed, no? So we have a direct example from history from the same region.
I would say that Vietnam also shows that economic relations can improve a lot even without a fundamental change in the regime.
China is also an example where economic relations improved.
I don’t see any reason to think that sanctions can’t be lifted. But it may require a complete collapse of Putins regime/party for it to happen on a short timescale. Is there any reason to think USA wouldn’t be willing to open up to a new leadership if they have a radically different attitude and pull out of Ukraine?
If Russia turns into something like North Korea or Iran, then yeah, the outlook is not good. But why should it be?
From a game theoretical point of view: I don’t think any leader of any country wants to end up like North Korea, so the precedent being set is good.
> but there was a monumental improvement in economic relations after the Soviet Union collapsed, no?
No. None of the sanctions levied against the USSR were lifted and still technically apply to Russia. (Enforcing them is another matter.)
> I don’t think any leader of any country wants to end up like North Korea
North Korea is doing better than South Korea on every metric except "consumer goods availability" and "international relations". Not sure you're making your case here.
> ...or Iran
Iran is more modern, developed and free than any other middle eastern country. (That includes Israel.)
Your ideas are wildly out of sync with actual reality.
Belsat's article[1] is a bit more detailed and I found this fragment interesting:
>According to Andrei Kramarenko, a leading expert at the Institute of Transport Economics of the Higher School of Economics, passenger traffic in Russia has almost stopped growing due to insufficient supply. In September, Russia's Ministry of Transport revised its annual forecast to last year's level of 103 million passengers carried by aircraft.
>Seat occupancy on Russian passenger planes this summer reached 93-95 percent. The expert believes that the situation will fail to improve next year, which may prompt airlines to simultaneously reduce average annual flight times and maximize redistribution of their share of seat supply toward the summer when effective demand and ticket margins are several times higher.
So basically it seems that their airlines are stretched thin.
The comment you replied to says that they can’t meet demand due to insufficient supply (due to grounded aircraft). Very high occupancy is consistent with that. If Delta suddenly had half as many aircraft they would always be full too.
In theory yes, in practice deliveries of domestic aircraft have stalled. The Sukhoi Superjet 100 for instance hasn't had a delivery in 2 years and I think the Tu-204 also did not get any deliveries though they expected some this year. It is however also very hard to find out what exactly is going on, because the information regarding civil aviation is quite restricted nowadays.
What is "the fleet"? This hits different companies in different ways. S7 which prior to the war was a very well received and modern airline has a meaningful number of those. For S7 31 out of 39 planes (with those engines) are out of service or about to go out of service. The total fleet today is only around 85 planes depending on how you count, and most of the planes that were ordered are not being produced for S7 at the moment. That's a pretty significant blow to the airline.
Total fleet of civilian airplanes.
Specifically S7 seems to be quite impacted (and they're about the only company impacted), but it sounds like it's mostly due to the low quality of these planes.
The problem is not the planes, but the maintenance requirements for the engines on those planes and Russia cannot do any maintenance due to the sanctions.
In general flying in Russia has been a pretty questionable experience since the beginning of the war. Their regulator is still barely functional at this moment and a lot of secrecy is happening. For instance you will find barely any incidents reports any more.
We have been intentionally avoiding Russian airlines for flights in and out of Russia for our family for the last few years due to safety concerns.
I haven't heard of any accidents in civilian air traffic in Russia in last few years. Of course you're free to make your choices.
Anyway, don't overestimate the issue: 2.5% of the fleet seems to be grounded right now.
They didn’t mention of Boeing fleet but the situation is supposedly the same. Together, while only small percentage, they are more efficient, can transport more, go farther, need less maintenance, so more desirable.
At this point, what would Russia have to do to get back onside with the rest of the world? Obviously, ending the conflict with Ukraine is the first step, but what else would they need to do? How long would it take for them to get out of the doghouse, so to speak?
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