Page 123 - RusRPTSept23

9.1.3 Aviation sector news
Russian airlines have persisted in importing spare parts for Western aircraft, defying sanctions aimed at restricting the flow of crucial equipment, according to recent reports by Reuters. Data from customs records reveal that major Russian carriers, including Ural Airlines, Nordwind Airlines, S7, and Aeroflot, have collectively imported approximately $1.2bn worth of spare parts between May 2022 and June 2023, a period marked by sanctions and economic pressures.
The actual value of these imports could be even higher, as Reuters' calculations were based solely on direct shipments to Russian airlines and their maintenance units. The analysis did not encompass shipments to other entities within Russia.
These spare parts, sourced from third-party suppliers in China, Turkey, the United Arab Emirates, Moldova, Tajikistan, and Kyrgyzstan, play a vital role in maintaining the airworthiness of Russia's fleet of Western-made aircraft, including 541 Boeings, Airbuses, and other similar models. The components range from Northrop Grumman devices to cabin pressure valves, cockpit displays, landing gear, and water filters.
Russia's airline sector was among the first to feel the impact of Western sanctions, exacerbated by the economic fallout from Russia's military involvement in Ukraine. The scarcity of spare parts and software updates initially posed problems for maintenance, yet the latest developments suggest that the aviation industry has successfully addressed many of these challenges.
9.1.4 Construction & Real estate sector news
Analysts worry that a bubble is forming in the real estate market. The potential challenges lurking within the mortgage market continue to be a topic of fervent discussion. Over the past years, the government's discounted mortgage initiative, in direct opposition to the Central Bank's stance, has contributed to inflaming the real estate sector. The allure of securing a mortgage at a reduced rate, occasionally even below the base rate, spurs individuals towards property acquisition. Consequently, this robust demand outpaces supply, leading to an upsurge in real estate prices, which saw an average increase of 21% across Russia last year. In a move to sustain this momentum, Putin extended the program until July 2024, albeit with a bumped-up discounted rate of 8% from the previous 7%.
As real estate valuations surge, developers sometimes resort to questionable practices, such as offering "0.1% mortgages" where the reduced rates are
RUSSIA Country Report September 2023 www.intellinews.com