The Russian government of Vladimir Putin has issued a mandate effectively seizing the planes of European companies, according to aviation industry sources in Russia. As is quite common among commercial carriers, Russian airlines lease most of their aircraft. In total, Russian airlines lease more than five hundred planes from foreign companies, mostly based in Ireland. Declaring these aircraft “strategically important,” the Russian government has ordered Russian airlines not to return planes to their owners in European Union (EU) countries. Pobeda, the low-cost subsidiary of Russia’s largest operator—state-owned Aeroflot—has already announced its intention to retain the planes and prevent foreign companies from repossessing them.1

The order comes after the EU gave those companies until March 28 to terminate their lease agreements with Russian carriers, part of its sanctions against the Russian government following its invasion of Ukraine. The EU has also banned Russian airlines from flying into EU airspace, meaning leasing companies can repossess their planes only when they land in non-EU countries, such as Turkey. To prevent repossession, Russian carriers are now flying routes only within Russia and Belarus.2

Aviation industry sources suggest that the Putin regime’s next step may be to nationalize foreign-owned aircraft.3 Indeed, Putin has already endorsed a plan to nationalize the assets of Western companies that have ceased trading in Russia, such as McDonald’s.4

This situation highlights just one of the many consequences for companies that operate in Russia and similarly backward nations: Their property rights are not respected or protected. Proper governments exist to protect and not violate rights. Such governments enable people and businesses to trade securely, knowing that no one may forcibly seize their property. However, when Western businesses operate under rights-trampling regimes such as that in Russia, they take a massive risk.

Such rights violations are not without precedent. In the 1960s and 1970s, statist governments throughout the Middle East nationalized the operations of Western oil companies in those countries. Western companies should have learned a lesson then. Apparently, they didn’t.

Working with these regimes not only exposes companies to the crimes of authoritarians, but it supports the horrific acts they engage in—from jailing and poisoning political opponents to genocide. Western companies should learn from this experience and pull out of all rights-violating nations—not just Russia, but China, Venezuela, Saudi Arabia, and all the rest. If they choose to continue, the consequences will be on them.

The Russian government of Vladimir Putin has issued a mandate effectively seizing the planes of European companies. Western companies should learn from this experience and pull out of all rights-violating nations.
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1. David Schaper, “Sanctions May Ground Russia’s Planes, But the Firms That Own Them Can’t Get Them Back,” NPR, March 13, 2022, https://www.wrvo.org/2022-03-13/sanctions-may-ground-russias-planes-but-the-firms-that-own-them-cant-get-them-back.

2. Simon Carswell, “Russian State Airlines Not Helping Irish Lessors Recover Aircraft,” Irish Times, March 7, 2022, https://www.irishtimes.com/business/russian-state-airlines-not-helping-irish-lessors-recover-aircraft-1.4820685.

3. Joe Cusamo, “Russia Considers Nationalisation of Aircraft to Save Aeroflot,” Travel Daily Media, March 10, 2022, https://www.traveldailymedia.com/russia-considers-nationalisation-of-aircraft-to-save-aeroflot/.

4. Jeanne Whalen, “Russia Considers Nationalizing Western Businesses That Have Closed over Ukraine Invasion,” Washington Post, March 10, 2022, https://www.washingtonpost.com/business/2022/03/10/russia-nationalize-foreign-business-ukraine/.

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