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How Russia's Airline Industry Was Pushed To the Brink in a Week (ft.com) 191

Posted by msmash from the collateral-damage dept.
Banned from swaths of the world's skies, denied access to vital spare parts, stripped of insurance and battling to keep hold of planes, Russia's aviation industry has in the space of a week been plunged into its gravest crisis in decades [Editor's note: the link may be paywalled]. From a report: Western governments have unleashed waves of sanctions since Vladimir Putin sent troops into Ukraine late last month, but few have delivered such a visible punch as those targeted at an industry that accounted for 6 per cent of the world's airline capacity last year. Flag carrier Aeroflot, which took delivery of its first western aircraft from Airbus when Boris Yeltsin was in the Kremlin, on Saturday announced it would stop all international flights other than to Belarus. S7, Russia's second-largest airline, has also scrapped flights outside domestic airspace. The industry's mushrooming crisis is "unprecedented, unpredictable and unforecastable," said Max Kingsley-Jones of Ascend by Cirium, the aviation consultancy. With no clarity on how long the sanctions from US and EU authorities will remain in place, experts warned that in a worst-case scenario Russian domestic carriers' schedules would shrink to levels not seen in three decades.
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How Russia's Airline Industry Was Pushed To the Brink in a Week

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  • ...not that many Russians would afford flying in the near future.

  • Wasn't the rise of Nazism fueled in part by economic collapse and hyperinflation in Germany after WW1 ?

    • Re:depression (Score:5, Insightful)

      by spun ( 1352 ) <loverevolutionary AT yahoo DOT com> on Tuesday March 08, 2022 @02:19PM (#62336977) Journal

      Yes. The key word being "after." So in WWII, we did the opposite: we paid to reconstruct Germany and did not demand they repay the damage they caused. In order to prevent another world war, we ensured all countries were economically tied to each other. Going to war would mean destroying your own economy, as all those ties were untied. Putin went to war anyway, thinking the other countries would simply overlook his violent aggression. He very, very badly miscalculated the response.

      So once Russia collapses, leaves Ukraine in defeat, and deposes Putin, we will remove all sanctions and help them rebuild. As long as Putin is in charge, though, there can be NO international cooperation with Russia. Who would ever trust him again? No one. But with someone else in charge? We will extend trust once more, and help Russia rebuild.

      There is a way out of this for Russia. There is no way out of this for Putin. His only choice now is to go out like his worst fear, sodomized with a pitchfork by an angry mob of his own countrymen, like Ghaddafi, or face trail in the Hague. That's it. I know Putin cares for his family, if he wants them not to die by gang rape, he should surrender and face the music. Otherwise, ugly things will happen, done by angry starving Russians.

      • Re:depression (Score:4, Interesting)

        by DaHat ( 247651 ) on Tuesday March 08, 2022 @02:38PM (#62337047)

        Putin went to war anyway, thinking the other countries would simply overlook his violent aggression. He very, very badly miscalculated the response.

        Did he? It's not as if he or anyone else really paid any price for annexing Crimea in 2014. Why would he or anyone else think he wouldn't again be able to nibble off a bit more? I think everyone is pretty surprised by the extent of government & private sector actions against Russia over the current matter.

        • Taking Crimea got Russia kicked out of the G8, which cost Putin and his pals personally billions. Putin had Trump spend 4 years focusing on getting Russia back in, and when that failed, Putin frankly had very few moves open to him to leverage his way back in. I think his plan was to take Ukraine quickly and use it as a bargaining chip. Not sure it would have worked, and almost 2 weeks in it certainly won't work now. Now Putin is stuck in a mess and likely looking for some way to claim victory and retrea

          • Re: (Score:2)

            by gtall ( 79522 )

            The Great Putini's days might be numbered or they may not. He's shown he cares not how many or whom he kills. He'll simply crack down on any dissent harder. I read an article (cannot recall where) that he had approx. a 300,000 - 600,000 goon squad who are not part of the army. So he has his own brownshirts, just Iran has their goon squad (fortified with Hezbollah when in need).

            His military is seemingly rife with graft at the high levels. They won't be stopping their gravy train anytime soon just because Put

            • The Great Putini's days might be numbered or they may not. He's shown he cares not how many or whom he kills. He'll simply crack down on any dissent harder.

              It's not The People who can reasonably rise up and depose Putin here, they are cannon fodder. It would have to be someone in the military, financially or otherwise motivated by the oligarchs, who are themselves losing money hand over fist right now.

              His military is seemingly rife with graft at the high levels. They won't be stopping their gravy train anytime soon just because Putini is stupid. It would take the rank and file to get seriously annoyed.

              The Russian economy is well and truly down the bog now in a way that makes their usual garbage economy look like paradise. That has a way of causing things to happen.

        • Why would he or anyone else think he wouldn't again be able to nibble off a bit more?

          He probably easily could have 'nibbled off a bit more'. Which makes it all the more baffling why he didn't just do that, rather than try to attack and destroy the entire country. Had he just marched into one or two small areas, 'annexed' them (al la Crimea) and called it a day, I doubt the world would have jumped into this fight with weapons and sanctions so heavily.

          • Re: (Score:2)

            by gtall ( 79522 )

            Apparently he has a grievance against the West for dissing him. Put quickly, the West told him they thought he had a short dick and this is his response. Now we know that it is much, much shorter than we figured. He's a tiny little fuck who just happens to have the FSB ready to off anyone who stands up to him.

          • Perhaps it is the strength of Ukranian resolve, which has been revealed to be extremely strong (as it would have to be for their identity to have survived the Soviet eta.) I imagine he didn't believe that he'd face so much resistance, and that his impressive looking but pathetically fragile military would have Ukraine sufficiently cowed that he could roll in and do whatever he liked.

            Russia would be better off with 1/4 of their current number of forces but in good condition, but sadly the only things they ha

        • Comment removed based on user account deletion

          • Also don't forget the world not giving a single shit when they encircled Aleppo in Syria and bombed it into rubble. You know, just like they're trying to do to Ukrainian cities now. And they did in Chechnya in the 90s.

            It's kind of the only game plan they have - 1940s siege warfare.

      • Re: (Score:2)

        by GlennC ( 96879 )

        There are two other options for Putin if he feels like he can't win:

        1. A nice glass of Polonium tea, or

        2. Press the 'nuclear button" and follow it with a nice glass of Polonium tea.

        I don't know Putin personally, but somehow I don't see him using a gun or a rope to make his final exit. I could be wrong, though.

      • Actually, the Allies did a lot to stabilize the Weimar Republic. The US offered a lot of very low interest loans in the 1920s, some of the terms so easy that Churchill observed in his History of the Second World War that Germany had better terms with US banks than the UK did. In fact, the Weimar Republic was in reasonably decent shape in the late 1920s, but it was the global Depression which killed Western largess that started the downward spiral of the Weimar economy, and paved the way for the rise of Nazi

        • Re: (Score:2)

          by gtall ( 79522 )

          I tend to think that Hitler had a lot to do with it. He was able to mesmerize the pop. at a time they were vulnerable to mesmerization.

          • Hitler was very good in using radio to spread propaganda...

            Same what Putin has done with social media...

          • A lot of that happened after Hitler became Chancellor. Certainly he had legions of loyal followers, but in any fair election he never approached a plurality in the Reichstadt. His direct route to power was to agitate against the Communists and other left wing parties, and while a lot of German conservatives were hardly enamored with the man (Hindenburg thought him a ridiculous figure), the instability (in part through far right agitation and outright violence) was led to successive "hung parliaments" with n

        • Re: (Score:2)

          by spun ( 1352 )

          The allies did some. They imposed huge war reparations though. Bank loans are one thing but when reparations are siphoning off most of your GDP, loans won't help.

          • The reparation schedules were eased as well, still quite high, and again Germany wasn't in terrible shape after the initial shocks. Yes, the onerous terms at Versailles played a part, but even the Allies by the mid-1920s realized that to rehabilitate Germany meant easier terms. The economy of the late 1920s made reparations manageable, though obviously the territorial concessions forced on Germany at Versailles were also another kind of humiliation. What Churchill was trying to demonstrate was that while Ve

      • I think a lot of that makes sense, but much depends on the stance that China will take. They've been more or less on the fence so far, not denouncing Russia's actions but not exactly approving of them either. An isolated Russia weakened by sanctions might provide China with an opportunity to take a more dominant position in their relationship, worse case scenario being that Russia ends up as a de facto vassal to China. They may face international backlash for that in the short term, but China has always

        • Re: (Score:2)

          by shanen ( 462549 )

          Mod parent up, though I think you should have updated the Subject.

        • Re: (Score:2)

          by spun ( 1352 )

          As long as Putin is in power and Russia stays cut off, China wins. They may have even been whispering in Putin's ear, goading him into attacking Ukraine. China wins either way. If Russia wins, the west is destabilized and demoralized. Good for China. If Russia loses, then yes absolutely, you end up with Russia a vassal state of China. China wins even more.

          But the worst case scenario for China is seeing Putin deposed and Russia making friends with the west. So far, this has not turned out how China wanted. P

          • Now only if we can figure a way to reduce the body count in the interim...

            Well, except for one particular kleptocrat dictator cunt's body that needs to hit the floor and go cold.

      • Putin is totally in a corner. He's screwed if he pushes forward, and he's screwed if he pulls back. The Russian people are only screwed if he pushes forward.

        But I honestly don't think they realize this. I've talked to people with actual ties in Russia. Regardless of a few thousand protesters, most Russians continue to support Putin. They lloooovveee their Czar. Let's see how they feel after a few years of eating nothing but reindeer fat and borsht.

        • Re: (Score:2)

          by spun ( 1352 )

          You know, I once thought that way too. But everything else about Russia has been shown to be a lie. Support for Putin is almost certainly exaggerated to a huge degree. There are much, much more than a thousand protesters. People who support the war in Russia are getting bricks thrown through their windows. Definitely don't want to put that invasion Z symbol on anything in Russia you want to stay in one piece.

      • I suspect angry starving people are more vulnerable to being misled, and blaming troubles on outgroups has always been too easy to sell by opportunistic politicians.

        • Re: (Score:2)

          by spun ( 1352 )

          And yet, history shows us plenty of times when the people turned on their leaders. Usually, because those leaders once seemed strong and scary, but now seem weak and defenseless. Putin has dug his own grave, and no one will help him out of it.

      • Re: (Score:2)

        by PPH ( 736903 )

        we paid to reconstruct Germany

        And Japan. So there's precedent to this. Both cases turned out fairly well. We may do the same for Russia* after Putin. The rebuilding costs will be much lower (unlikely that Ukraine will be inflicting much damage on Russia). But the West man impose similar restrictions on Russia's military capabilities as a condition for economic normalization. Basically wind down to a defensive force with mutual protection treaties with neighbors.

        *And Belarus.

        • Re: (Score:2)

          by mspohr ( 589790 )

          Nothing much to rebuild in Russia. Ukraine will have a lot to rebuild.
          After Putin, just remove the sanctions on Russia and let it go back to being a gas station.

        • Personally I'd be happy with "Hey Russia - you fucked up bigtime and now you're in the jackpot. You know how you get out? Dismantle your nukes, and turn the plutonium into mixed-oxide reactor fuel. And you know what, we'll do the same just so we don't have this spectre play out ever again. Our inspectors will be there in a week to oversee the process."

          "Or, we leave the sanctions in place and in a year your economy will be so far down in the toilet you'll look up to see turds and think 'man, remember the

      • Not that I'm hoping you're wrong, but there are other ways this can go out. Putin still has support in Russia, media that play his every song, and true believers. So he can let the stock market open, where everything is set to crash. After all drops down, he can buy it for next to nothing, secretly, and then drop his silly business in whatever way he feels like, making whatever deal and calling it a great win, claiming he had planned for whatever outcome he gets. Life turns back to normal, but the nasty san
      • Big diff between ends of WW-1 and WW-2 and now: The crazy idiot has nuclear weapons, and there is a very real chance to get a friendly person in the White House in 2024.

    • Wasn't the rise of Nazism fueled in part by economic collapse and hyperinflation in Germany after WW1 ?

      That was the general consensus when I was in school (*), but the "The Great War" [youtube.com] channel pointed out that Germany was past its economic problems by a couple of years when the WWII broke out.

      Reading "Mein Kampf" with an historical eye, Hitler describes society as having a lot of poor (including himself), but not that society was poor in general. His problem (in his words) was the erosion of traditional Germanic virtues (Hitler was Austrian). In his eyes it was more about the disparity of wealth than the over

      • Re: (Score:2)

        by Moryath ( 553296 )

        You're half correct and half mistaken.

        Germany WAS getting past its economic problems by the time WW2 broke out, but that's not when Hitler's rise started. He started his rise to power in the 1920s, and he did it by instigating people who were still experiencing the economic strife they'd been in since the end of WW1 and directing all their anger towards scapegoats in the form of various ethnic and religious minorities. He spun a tale of Germany not as the loser in a rather nasty war, but rather as being "

      • Re: (Score:2)

        by chthon ( 580889 )

        Economic sanctions because the Japanese Army invaded Manchuria in 1931, a bit of the same thing that Putin is now doing with Ukraine.

        But the CCP has shown that it does not have one single atom of humanity in them, by supporting Russia and nicely forgetting the previous fact.

    • Re: (Score:2)

      by hey! ( 33014 )

      Well, yes, but it's more complicated than that, and much of what is popularly believed is a myth. When the Nazis ended the Weimar Republic in 1933, hyperinflation had actually been ended a decade earlier.

      Both the Communists and the Nazis made major gains in the elections of 1932, but by that time the German economy had started to recover from the global recession triggered by the Wall Street crash of 1929. German war reparations were cancelled that year too -- not that Germany was paying them, and in fact

  • The same way everything else was pushed to the brink in a week during the start of the pandemic. It's the same story everywhere; Normal rubes are told they need to have 6 months of salary saved up when they can't even save enough for a flat tire, but meanwhile, multinationals with literal billions in the bank scream bankruptcy after a week of reduced (Not zero, but reduced) profits.

  • but Russia can ban and jail the foreign repoman and skip out on the bill.

    • Aircraft needs continued maintenance. They won't get spare parts easily anymore.

      • Sure they will. They'll just buy the sub-standard Chinese counterfeits that are so common and widely available that they wind up being used... and causing crashes... even in countries that actually have aviation regulations that make them illegal. It's kind of like the situation in Amazon's warehouses where the counterfeits are in the same bins as the real thing and it's a crapshoot which one you get.

        https://www.google.com/search?... [google.com]

        • About the only actual counterfeit aircraft parts are fasteners of all kinds. The rest is genuine, just not officially usable.

    • Why do you think the airlines are not flying internationally? This is one of the reasons.

  • Good. Airlines = airlift since all Russian aircraft are effectively military assets since Soviet times.

    Shut off spare parts and they'll be static displays soon enough if they do fly.

  • Russia has some very ugly options on the table (Score:4, Interesting)

    by DeplorableCodeMonkey ( 4828467 ) on Tuesday March 08, 2022 @02:39PM (#62337055)

    That the ruling class of the West doesn't want to discuss.

    The first is they can nationalize all of the shares held by foreigners on the Moscow stock exchange. That's 81% of the shares on the market [reuters.com].

    Blackrock and others are also potentially going to lose a ton of money in the bond markets between commercial and government debt if Russia decides to retaliate by canceling its sovereign debt and telling its corporations they're off the hook.

    What most folks don't realize is the Western investment markets are a powder keg that's bigger and more precarious now than the markets were in early 2008. Those who predicted the bailouts would send a message that says criminality and unethical behavior will be covered by tax payers were right, and the level of misconduct is through the roof.

    It wouldn't take much from this conflict to potentially set up a series of dominos that eventually topple the Western markets.

    • Re:Russia has some very ugly options on the table (Score:4, Insightful)

      by Miles_O'Toole ( 5152533 ) on Tuesday March 08, 2022 @02:42PM (#62337069)

      Western markets have been overvalued for years. One way or another, a correction is inevitable. There's worse ways to have it happen than opposing a murderous tyrant.

      • Re: (Score:2)

        by shanen ( 462549 )

        You're feeding a troll, but if we have to bring more politics into it, then I think this war may be a godsend for the Democrats in November. Whatever isn't fixed by then, they can blame Putin and Putin's War in Ukraine for it. Even better if the fake Republican candidate has defended Putin. Talk about hanging a giant albatross around your neck... You can't make those pesky videos go away.

    • The first is they can nationalize all of the shares held by foreigners on the Moscow stock exchange.

      If they do that, they'd never see a dollar of foreign investment again.

      Blackrock and others are also potentially going to lose a ton of money in the bond markets between commercial and government debt if Russia decides to retaliate by canceling its sovereign debt and telling its corporations they're off the hook.

      Blackrock would survive if Russia decided to cancel its sovereign debt. Russia would not.

      • Re: (Score:2)

        by Tailhook ( 98486 )

        If they do that, they'd never see a dollar of foreign investment again.

        That would be ideal. They'll turn to China, of course. China is going to eat Russia alive.

      • Re: (Score:2)

        by jbengt ( 874751 )

        If they do that, they'd never see a dollar of foreign investment again.

        Yeah, just ask Greece how defaulting meant they never got . . . uh, never mind.

    • Re: (Score:2)

      by chill ( 34294 )

      That would require the Moscow Stock Exchange to, you know, open again. And, of course, everything to not drop down to zero almost immediately as everyone tried to sell.

      Yeah, Black Rock and others hold about $170 billion in Russian assets [disruptionbanking.com] as of December 2021, but that's a drop in the bucket. Black Rock is the largest asset manager in the world, with over $10 TRILLION managed. They can write off Russia 100% and ride it out as a ripple.

      Western markets aren't going to get toppled over Russia, who looks to now b

    • if Russia decides to retaliate by canceling its sovereign debt and telling its corporations they're off the hook.

      That could be a case of "cutting off your nose to spite your face". Sure, you can get out of your CURRENT debt, but how will you raise future capital to get your heavily-sanctioned economy going again?

    • Re: (Score:2)

      by MeNeXT ( 200840 )

      The first is they can nationalize all of the shares held by foreigners on the Moscow stock exchange.

      How did that work out in Cuba when it mostly involved US assets?

    • The first is they can nationalize all of the shares held by foreigners on the Moscow stock exchange.

      You mean the stock exchange which hasn't been open for a week because the valuations of all those companies is close to zero? Nationalizing all those companies, not shares, would be case closed for Russia. No one will invest which means no money. With Russian banks cut off from the outside world, a complete and total collapse would be inevitable, and fairly quickly based on current conditions.

      If

    • Re: (Score:2)

      by mspohr ( 589790 )

      Western governments will bail out all the banks and investment houses that lose money on their Russia investments. That's what they did in 2008. They'll do it again.

  • I haven't RTFA since it is paywalled and maybe it is mentioned in TFA but many planes in Russia are on leasing contracts. If the Russian companies keep them one way or another the foreign companies which lease them are screwed.

    • Re: (Score:2)

      by shilly ( 142940 )

      The leasing companies are screwed, but the Russian airlines are even more screwed. If they don't honour leasing obligations, they won't be able to lease planes again in the future. And that's the end of them as an industry.

    • They will probably get some financial help from Western governments in order to "ride" this issue.All in all, even the largest Russian airline company can not have leased so many planes.

  • It does no service to readers to bait us with quotes we can't place in full context without paying.

  • Don't worry. Russia is the land of railroads. And, unlike in the USA, Russian trains depart on time, and arrive on time too. Russia can even brag about having bested USA in high speed rail access. I have tried to reach from place A to place B by trains in USA twice, and it was a fucking joke. First time, the train arrived and left to early, fucking up everybody waiting for the fucking Amtrak train. The second time I tried to take a train in the USA, it never arrived, and the a clerk came to me and told me t

  • I remember reading about WWII and how the West was squeezing Germany until they said "fuck you world". Did you know they are the greatest power in Europe now despite all that death and devastation? Funny how things work out

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