Ten Russian airlines have opened "type C" ruble-denominated accounts to enable them to make payments to foreign lessors, a government official and a source close to the government told the business daily Vedomosti on June 1.
According to a decree that Russian President Vladimir Putin issued in early March in response to international sanctions after the country's aggression against Ukraine, companies with debts to foreign entities in "unfriendly states" can open type C accounts to send payments to them. A month later, Putin signed a decree temporarily converting contracts "in the transport sphere" to the Russian currency.
According to Vedomosti's sources, among the carriers now ready to pay for leases in rubles are Aeroflot and its subsidiaries Pobeda and Rossiya, S7 Airlines, smartavia, Alrosa Aviakompania, Aurora, Polar Airlines, Yakutia Airlines, and Yamal Airlines. And five more - iFly Airlines, Izhavia, NordStar, RusLine, and Ural Airlines - are in the process of setting up such accounts.
S7 confirmed to the newspaper: "In accordance with government-approved procedures, S7 Airlines has opened ruble accounts and will offer lessors to receive payments in rubles."
Aeroflot and Smartavia provided Vedomosti with similar messages. "We are ready to fulfil our contractual obligations to lessors in full," an Aeroflot representative assured, while a Smartavia spokesperson said: "Yes, we have complied with the requirement of the March 5, 2022 presidential decree to open such a special account."
According to the unnamed federal official, lessors have not yet received money via the accounts, as contracts with lessors typically include prepaid letters of credit covering three to eight months and deposits for maintenance. It is after this that the companies will reportedly initiate their ruble transfers.
Lessors have deposits and letters of credit in excess of current operating lease payments, an S7 representative told Vedomosti, "so it is fundamentally wrong to assume that S7 is using a fleet of aircraft for free for three months."
However, despite the fact that Russian airlines plan to transfer money to C accounts, lessors cannot actually take it as long as sanctions remain in force, Forward Legal adviser Igor Kokin told Vedomosti, as failure to comply with sanctions risks administrative and criminal liability in Europe and the United States.
Under to Russian law, though, an airline that transfers money to a C account is considered to have fulfilled its obligations under the contract, the government official said.
"Leasing companies will withdraw the funds when they have the opportunity. In the meantime, the money will accumulate in the accounts," the official said.
