Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Carriers Lobbying to Shop for Jets Abroad

With more planes being decommissioned each year and with new craft not immediately available from domestic producers, some airlines have been increasingly pushing the government to make it easier to import foreign-made jets.

At a civil aviation round table earlier this month, Aeroflot CEO Valery Okulov urged the government to make conditions for importing foreign craft "more acceptable."

Currently, value-added and import taxes add up to 40 percent combined, dampening airlines' enthusiasm for acquiring foreign planes.

Aeroflot's more than 100-strong fleet includes 27 Boeings and Airbuses that account for over half its business, thanks in part to a tax clearance it negotiated with the government in return for signing up to buy domestically produced Ilyushin Il-96-300 long-range craft. But these remain unfinished at the Voronezh production plant, and Okulov said this has upset some of Aeroflot's plans. Meanwhile, state-sponsored programs to lease domestic aircraft are not yet off the ground, with the government delaying their financing.

Aeroflot's other grievance is the lack of short-range planes to replace the outgoing Tupolev Tu-134, which, along with the Il-86, stopped flying to European Union destinations earlier this month with the introduction of new noise regulations. The 100-seater Tu-334 that Aeroflot and others are interested in is still awaiting certification, while the new Tu-204 and Tu-214 are flying in meager numbers.

Okulov has repeatedly said import duties should be lifted until those planes are ready and produced in sufficient numbers to meet industry demand. And he is not alone. Regional carrier KrasAir is looking to buy Boeing craft, and Tyumenaviatrans is in preliminary talks with Canadian plane maker Bombardier. However, Tyumenaviatrans general director Andrei Martirosov has said there will be no serious talk of buying or leasing until the prohibitive taxes are lifted.

Last week, State Customs Committee head Mikhail Vanin said government proposals have to be worked out for zero to 5 percent import duty on foreign aviation technology that lacks Russian analogs.

Tupolev head Igor Shevchuk said the state should not ease the taxes if it wants to preserve the domestic aircraft manufacturing industry.

"These [foreign] planes will not be just leased for a year or two, but for much longer -- and when our planes enter the market, would airlines switch to them?" Shevchuk said.

Seeking to enter the World Trade Organization, Russia has to decide whether to support its industry -- which in Soviet times produced hundreds of aircraft a year but in recent years could not deliver even a dozen -- or scrap any such efforts altogether. The WTO is keen for Russia to do the latter, and the two parties are to discuss the matter this summer.