So far Russian civil aerospace firms spared from sanctions

As Russia sends troops into separatist areas of Ukraine, and facing the prospect of a full-scale invasion, the U.S. and its allies are beginning to target Russian entities with sanctions.

The U.S. and its allies began sanctioning Russian officials and banks shortly after Russian tanks and equipment began pouring into Ukraine’s east once more following Putin’s Monday speech. “We’re implementing full blocking sanctions on two large Russian financial institutions: V.E.B. and their military bank,” President Biden said Tuesday Feb. 22. “And because of Russia’s actions, we’ve worked with Germany to ensure Nord Stream 2 will not—as I promised—will not move forward.” Biden also promised more to come should Russia escalate further inside Ukraine, reported Defense One.

We haven’t yet seen efforts by the Biden Administration or European governments to directly target Russia’s civil aerospace programs, which include both the Irkut MC-21 narrowbody airliner and the Irkut Superjet 100. Development of both of these aircraft began at a time before Putin adopted an aggressive posture to NATO and the United States, and both aircraft make use of a considerable amount of Western content. Sanctions could cripple the programs in the short term, though the Russian government is trying to redesign both aircraft to make them less reliant on foreign content. Western-built airliners from Airbus and Boeing also form the backbone of the Russian airline industry.

There doesn’t seem to be any appetite at the moment to target what amounts to civilian infrastructure in Russia. Russian airlines are likely to continue to receive manufacturer support from Boeing and Airbus. Targeting both the MC-21 and Superjet 100 would also have limited utility since the Russian government is already moving toward making the programs resistant to sanctions. An embargo of engines, parts, or avionics systems would cause headaches in the short term but would not kill either program. dsm.forecastinternational.com