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Western or bust

01 November 2005

Steve Thompson, editor of Concise Aerospace, the leading Russian aviation newswire, looks at how Russian airlines are paying import taxes.

Read more: Airlines airline Airbus Aviation aerospace

The issue of fuel efficiency among Russia's dwindling fleet of Soviet-era aircraft is confronting Russian airlines with a dilemma. Keep flying obsolete and fuel-inefficient Russian aircraft and suffer the impact of rising and seemingly uncontrollable increases in costs, or alternatively pay the premium for the import of western aircraft created by the country's duty and taxation barriers.

The barriers are designed to protect a domestic aerospace industry that is scarcely producing aircraft and where almost all the major aircraft producers are barely functioning. Both options have marked impacts on carriers' already challenged bottom lines, but for many the only competitive option has become the acquisition of western aircraft.

For major carriers over the past two years, the logic of leasing western aircraft has become increasingly compelling.

The spurious benefits of operating Soviet-era aircraft, that are fundamentally ill-suited to modern civil aviation, are fast disappearing because the advantages of acquiring the...

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