Premium
5 min read . Updated: 10 Apr 2022, 06:23 PM IST When the U.S. and Europe launched sanctions against Russia and its elite over the war in Ukraine, oligarchs scrambled to find a haven for their private jets. They are flocking to Dubai, but once they get here, they effectively can’t leave.
Dozens of private jets connected to Russia’s wealthy are sitting on the tarmac at a terminal in the desert, part of a buildup of more than 100 planes at the airport since Russia’s invasion on Feb. 24, according to jet-industry executives, satellite images and data from aviation research firm WINGX.
The United Arab Emirates, which counts Dubai as its most populous city, has become one of the most attractive places to park private jets and other movable assets such as superyachts because it has largely avoided public criticism of Russia and hasn’t said it would enforce sanctions imposed by Western capitals. Instead, the Persian Gulf state has called for a diplomatic solution in Ukraine, saying that taking sides would lead to more violence.
“All the Russians have moved their airplanes to Dubai because Dubai isn’t part of the sanctions," said Alireza Ittihadieh, chief executive of London-based aircraft broker Freestream Aircraft Ltd.
The world’s best-known Russian oligarch, Roman Abramovich, flew his $250 million Boeing Co. 787 Dreamliner into Dubai on March 4, its last known location, according to tracking site Flightradar24. The plane is designed for 250 passengers.
The last known location of a Gulfstream G650ER, which website SuperYacht Fan says is owned by sanctioned steel tycoon Viktor Rashnikov, was in the U.A.E. It is also the last-known flight-radar location for an Embraer SA jet connected with sanctioned businessman Mikhail Gutseriev and a Bombardier Inc. BD700 Global Express associated with Arkady Rotenberg, a sanctioned entrepreneur and former judo partner of Russian President Vladimir Putin.
The cost of parking at Dubai’s Al Maktoum International, the busiest private jet terminal in the U.A.E., is roughly $1,000 a day, according to another person familiar with the pricing.
Western governments, by contrast, have frozen the assets of sanctioned individuals indefinitely, without having to prove criminality.
A Bombardier Global 6500 private jet that the U.K. government said was connected to oil tycoon Eugene Shvidler was scheduled to fly from London to Dubai on March 8. But the plane never made the flight and was detained by U.K. authorities, who also sanctioned the businessman, a close associate of Mr. Abramovich.
A spokesman for Mr. Abramovich didn’t respond to a request for comment. Spokespeople for Magnitogorsk Iron & Steel Works, which Mr. Rashnikov chairs; SFI Investment Holding, connected to Mr. Gutseriev’s family; and Stroygazmontazh, which Mr. Rotenberg founded, didn’t respond to requests for comment on their behalf.
Sanctions haven’t only targeted Russian oligarchs directly to exert pressure on the Russian leader to change course in Ukraine. They have also hit the broader aviation sector and affected regular Russians owning planes or chartering them from European private-jet operators.
Those sanctions have largely meant that once Russian jet owners get their planes to Dubai, they can’t fly them anywhere else, according to aviation lawyers and private jet brokers.
The U.S. and EU have prohibited companies from insuring aircraft owned by Russians or offering services such as fleet management, repair and maintenance. Most aircraft owned by Russians are insured by London firms and managed by European companies that will now have to rethink their commercial relationship with Russians, lawyers and industry executives said.
“A lot of the Russian-related airplanes have moved to the U.A.E. because you can fly in the airspace there," said Steve Varsano, chief executive of the Jet Business, a London-based sales broker for private aircraft. “But once you get there you’re pretty much grounded because you can’t maintain the airplanes."
Boeing, a producer of private jets and the main source of maintenance for most owners, said it won’t support any aircraft owned or connected to sanctioned Russians, meaning the jurisdictions where the aircraft are registered are likely to deem the jets unairworthy because they can’t get manufacturer support, according to aviation lawyers and private jet executives. Some aircraft registries, such as the Isle of Man in the British Isles, have said they are deregistering jets linked to politically exposed Russians, meaning the planes will likely have to be registered elsewhere before they can fly again.
The U.S. Commerce Department has threatened jail time and fines for “any person anywhere, including within Russia" if they violate sanctions on aircraft.
In total, 30 private jets with their home base in Russia were parked at Dubai’s airports as of April 6, most for more than seven days, according to Hamburg-based WINGX, the research firm. It defines an aircraft’s homebase as the country from where the jet flew the most in a year, rather than where it is registered.
Another 90 aircraft were parked in Dubai that are registered around the world. It couldn’t be determined how many of those are connected to Russians and how many are being used by non-Russian visitors to Dubai.
Satellite images taken by U.S.-based Planet Labs PBC show a gradual buildup of private jets from Feb. 16 to April 3.
An official for the U.A.E. civil-aviation authority said it is a regular practice for private jet owners to park their aircraft at a convenient airport when not flying. Spokespeople for Dubai Airports, which runs airports in the emirate, and the Dubai Media Office didn’t respond to requests for comment.
Other airspaces that remain open to Russians also have private jets parked there, according to WINGX. There are 54 in Istanbul, six of which have a home base in Russia, and another two Russia-linked private jets are in Tbilisi, Georgia, the research firm said.
At least three private jets in Dubai were being repossessed by banks as the owners can’t pay the mortgages due to sanctions, said Mr. Ittihadieh of Freestream Aircraft.
Mr. Abramovich’s 787 Dreamliner would be difficult to sell and likely will remain in Dubai until Ukraine conflict ends and sanctions against Russian oligarchs are reconsidered, Mr. Ittihadieh said.
Few firms are willing to explore buying a Russian-owned or -linked private jet because the ambiguity created by sanctions means people are afraid of blowback from European or U.S. authorities, Mr. Ittihadieh added.
“Right now they are all door stoppers—nobody will want to deal with them," he said.
This story has been published from a wire agency feed without modifications to the text
Download the App to get 14 days of unlimited access to Mint Premium absolutely free!