Russia allows S7 Airlines to return leased Boeing 737 MAX aircraft

The Russian government has authorized S7 Airlines to return its Boeing 737 MAX fleet to lessors. The carrier has two 737 MAXs that it is currently unable to operate due to ongoing sanctions against Russia. We explore this story in more detail below.

S7 returns 737 MAX leases

The Russian carrier S7 Airlines has obtained special authorization from the Russian authorities to return its two Boeing 737 MAX to their owners. The two jets, both variants of the Boeing 737 MAX 8, are owned by Aviation Capital Group (ACG) and Air Lease Corporation (ALC), two California-based leasing companies.

S7 Airlines has essentially been stuck with the plane for more than two years since the MAX grounded in March 2019. Under Russian law, carriers must obtain special permission from the government before they can return leased planes.

S7 Airlines has obtained an exception from the Russian authorities. Photo: Preston Fielder

The airline, along with another unnamed Russian carrier, wrote to the government earlier this year asking to return their leased planes to Western owners. They argued that it was impossible to operate the aircraft without Western support

Russian Prime Minister Mikhail Mishustin signed this within days, giving S7 the go-ahead to return the plane. Interestingly, the exchange will not be possible directly from Russia due to the sanctions, so a third country, which would be Turkey, will be involved.

Stored for more than two years

The aircraft in question are registered VQ-BGV and VQ-BGW and are both less than four years old. The aircraft was delivered directly to S7 Airlines in October 2018 after first flying weeks earlier.

Both MAX jets have been in storage since March 2019 after the MAX was grounded worldwide following two fatal crashes. While Russia lifted its ban on MAX operations (with caveats) in July, S7 Airlines was unable to operate its two MAXs due to economic sanctions against Russia, including spare parts. aircraft and maintenance support, effectively rendering the jets unusable in the long term.

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It is unclear whether this decision heralds a change in the Russian government’s approach to leased aircraft. Photo: Anna Zvereva via Flickr

As Simple Flying reported in May, another Boeing 737 MAX destined for S7 Airlines has received Turkish registration and will fly for AnadoluJet. The Siberian airline had an order for 10 MAX jets but ultimately only took delivery of two.

Aircraft lessors lose billions

The question of what will happen to Western planes leased by Russian carriers has been unclear since the start of the conflict in Ukraine. Some lessors initially hoped to get their planes back, while others, including ALC, have written off planes stranded in Russia.

So far, the Russian government has not wanted airlines to return their leased planes and has made it clear from the start, costing the leasing companies billions of dollars. BOC Aviation, a Singaporean leasing company, is the latest company to write off its jets stranded in Russia to the tune of $800 million.

What do you think of the crisis affecting leasing companies whose planes are blocked in Russia? Do you think they will ever get their plane back? Let us know in the comments.