[2025] EWHC 1430 (Comm)

As set out in detail in Schedule 1 to this judgment, the aircraft and engines relevant to these claims were leased to a number of different Russian lessees. It is convenient to say more about the Russian civil aviation sector and about those lessees at this juncture. This summary is based principally on the Joint Memorandum between the Civil Aviation experts, and other evidence of those experts which was not significantly in dispute.

Although there were over 100 airlines registered in Russia in 2022 it was a concentrated sector. At the beginning of 2022 the Aeroflot Group (viz Aeroflot itself, Rossiya and Pobeda, the Group’s low-cost airline) had a market share of about 42%. The top six (i.e. the Aeroflot Group, S7, UTair and Ural) accounted for some 69.6% market share of all passengers, and the top 15 for about 95%.

The lessees relevant to this action may be briefly described as follows.

Aeroflot was created in 1994 as the assignee of commercial rights to almost all international routes which had been previously operated by Aeroflot – Soviet Airlines.

Aeroflot’s Director-General from March 2009 – November 2020 was Vitaly Savelyev. Vitaly Savelyev became Minister of Transport and was appointed as Chairman of the Board of Aeroflot in November 2020.

In December 2021, Aeroflot was owned in the following shares: The Russian Federation 57.3% (Ministry of Finance 34.1% and Federal Agency for State Property Management 23.2%), free float 40.7%, quasi-treasury shares 2%, management shares 0.0002%. The Russian Federation’s shareholding in the Group increased to 73.77% in July 2022.

In December 2021, Aeroflot’s fleet was 183 aircraft, owned in the following proportions: 15 (8.2%) by the airline, 81 (44.3%) by domestic lessors, 29 (15.8%) by EU/UK/US lessors, 58 (31.7%) by other foreign lessors.

Rossiya is a subsidiary of Aeroflot. It was created in 2004 by a government-ordered merger between the state-owned St Petersburg-based Pulkovo airline and the Moscow-based Rossiya airline, which was the commercial part of the State Transport Company (an organisation responsible for transporting government officials).

In February 2011, following the financial crisis and a government bailout, Rossiya became a subsidiary of Aeroflot. Since early 2014 Rossiya has been fully under the commercial management of Aeroflot, and in the words of AerCap’s civil aviation expert, Mr Rybak, it has effectively ‘been transformed into a north-western branch of Aeroflot’.

In July 2020, Aeroflot adopted a new development strategy for its group, under which Rossiya would concentrate on regional, social, and subsidised flight destinations, often with fixed tariffs. It was envisioned that the airline would operate 250 aircraft, of which 235 would be Russian-produced. Accordingly Aeroflot transferred all its Sukhoi Superjet (‘SSJ’) 100 aircraft, and its orders for new SSJ 100s and MS-21s, to Rossiya (the transfer being completed in May 2023).

Rossiya did not publish data on its ownership structure at the material time. Mr Rybak expects that in February 2022, the position was that 75% minus one share was owned by Aeroflot, and 25% plus one share was held, in effect, by the St Petersburg government.

In February 2022, Rossiya’s fleet was 125 aircraft, owned in the following proportions: 25 (20%) by the airline, 79 (63.2%) by domestic lessors, 18 (14.4%) by EU/UK/US lessors, and 3 (2.4%) by other foreign lessors.

S7 is the brand name of JSC Siberia Airlines. It is the largest private airline in Russia and the second-largest air carrier (after Aeroflot). Prior to 2022 it operated domestic and international flights, although the majority of its business was in the domestic market (the ratio of domestic to international passengers was between 10:1 and 15:1 every year). S7 made domestic operations profitable through aggressive and very strict financial and operational management.

All significant decisions in the S7 group are made by the Filev family, in particular Vladislav Filev. Their aim has been to grow the wealth of the family through the commercial efficiency of their enterprise.

100% of the shares of JSC Siberia Airlines were in 2022 owned by the S7 Group. In turn the S7 group was owned by Vladislav Filev (49.94%) and his daughters Tatiana and Maria (25.05% each). This ownership structure developed after the death of Natalia Fileva, the wife of Vladislav Filev and co-founder of S7 Airlines, in March 2019.

S7’s fleet was 108 aircraft, owned in the following proportions: 2 (1.9%) by the airline, 6 (5.6%) by an SPV, 6 (5.6%) by domestic lessors, 84 (77.8%) by EU/UK/US lessors, and 10 (9.3%) by other foreign lessors.

Ural Airlines emerged in 1993 as a result of privatisation. It stems ultimately from the Sverdlovsk air squadron established in 1943.

The primary hub of Ural Airlines is situated in Yekaterinburg. The airline follows the concept of a dispersed route network in which aircraft are stationed in various cities and operate flights to different destinations. At the same time the airline operates a highly condensed schedule, with extensive flight hours. In 2021, Ural Airlines served 9.2 million passengers. The airline served about 6.4 million passengers on domestic flights and 2.7 million on international routes, of which 1.7 million travelled to Commonwealth of Independent States (‘CIS’) countries.

In February 2022, Sergey Skuratov owned 90.47% of Ural. An additional 0.0025% was held by Alexandr Zinovev, Mr Skuratov’s deputy. 0.0078% was distributed equally among 13 individuals, including Mr Skuratov’s son, Kirill, who acts as the first deputy general director and commercial director. It is unclear who holds the remaining 9.5%. Mr Skuratov, who is a former pilot, exercises considerable control over the airline and its management.

In February 2022, Ural’s fleet was 53 aircraft, owned in the following proportions: 50 (94.3%) by EU/UK/US lessors, 3 (5.7%) by other foreign lessors.

UTair is a public listed company. It is a key part of the transport infrastructure of Western Siberia, the largest oil and gas region of Russia. The UTair group includes passenger and cargo airlines, one of the largest helicopter operations in the world, and a variety of MRO and engineering companies and facilities.

UTair’s business model focusses on domestic operations in and around the Western Siberia region. It operates from three major hubs: Moscow (Vnukovo), Tyumen, and Surgut.

In 2021, AK-Invest, a company affiliated with Surgutneftegaz (one of Russia’s oil and gas majors), held 50.11% of UTair’s shares. The Khanty-Mansiysk Autonomous Okrug held 38.82% of shares (through its Department for State Property Management). The Tyumen Region held 8.44% of shares (through its Department of Property Relations). The remaining 2.619% was held by minority shareholders.

Andrey Martirosov became UTair’s CEO in January 1999, having led the largest branch of Tyumenaviatrans (the predecessor of UTair) in Surgut before that. Mr Martirosov has served as the Chair of the Board of the Russian Association of Air Transport Operators (AEVT) for several years.

In February 2022, UTair’s fleet was 62 aircraft, owned in the following proportions: 46 by the airline (74.2%), 1 by an SPV (1.6%), 6 by domestic lessors (9.7%), 8 by EU/UK/US lessors (12.9%), 1 by other foreign lessors (1.6%).

Aurora was founded in 2013 by an agreement between Aeroflot (51% owners) and the Sakhalin region. It was intended to serve as an airline for the Russian Far East region.

In a second effort to build up air traffic in the Russian Far East, a revamped Aurora was launched in 2021. In March 2021 Aeroflot finalised a deal to sell its 51% stake in Aurora, and Alexey Chekunkov (Minister of Eastern Development) announced funding of 3.5 billion roubles to subsidise the united Far Eastern Airline in 2021. On 27 July 2021 Aurora, as this unified Far Eastern Airline, officially began. The Aurora group now includes regional airlines including Khabarovsk Airlines, Yakutia, Polar Airlines, Kamchatka, and Chukotavia. It was reported on aviastat.ru at the end of 2022 that all airlines would transition to a single brand (Aurora).

Aurora’s principal focus is on transporting passengers and cargo within, to and from the Far East of Russia. It makes some international flights. Even prior to the invasion of Ukraine, Aurora was heavily dependent on subsidies.

In February 2022, Aurora was owned in the following shares: 50% minus one share by the Sakhalin Region, 5% each by the other ten regions of the Far East, and a ‘golden share’ with a decisive vote at shareholder meetings by the Ministry of Development of the Far East.

The longstanding leader of Aurora (since its founding in 2013) is Konstantin Sukhorebrik. He also served as Deputy Chair of the Sakhalin Regional Duma between 1996-2000 and 2000-2004.

In February 2022, Aurora’s fleet was 20 aircraft, owned in the following proportions: 9 (45%) by the airline, 4 (20%) by domestic lessors, 5 (25%) by EU/UK/US lessors, and 2 (10%) by foreign lessors.

Yakutia Airlines was established in July 2002 by decree of the President of the Republic of Sakha (Yakutia) as a state unitary enterprise, formed by merging Sakha Avia and Yakutsk Airlines. In 2004 it transformed into a JSC.

Yakutia is a small airline focussed on domestic flights on socially valuable routes in the Far East of Russia. It enjoys support at both regional and federal government levels, including approximately 14 billion roubles of subsidies between 2014 and 2021.

In February 2022, 98.67% of JSC Air Company ‘Yakutia’ belonged to the government of the Republic of Sakha, and the remaining 1.33% was owned by JSC ‘Komdragmetall Respubliki Sakha (Yakutiya)’. As part of the process of forming a single Far Eastern Airline, 25% plus one share was transferred to Aurora Airlines in November 2022.

Andrey Vinokurov has been the CEO of Yakutia since September 2021. Prior to that, he was commercial director from 2018 to 2021 and deputy general director for commerce from February 2021.

Yakutia’s fleet is 15 aircraft, owned in the following proportions: 1 (6.7%) by the airline, 6 (40%) by domestic lessors, 7 (46.7%) by EU/UK/US lessors, and 1 (6.7%) by other foreign lessors.

OJSC Yamal Aviation Transport Company was established in 1997 on the initiative of the administration of the Yamalo-Nenets Autonomous Okrug (YaNAO). YaNAO is located in the north of Western Siberia and in the Subpolar Urals, and is rich in oil and gas. Yamal is headquartered in the capital of (‘YaNAO’), Salekhard.

Yamal is a small airline which has been closely tied to local government. Its primary commercial objective is to provide affordable flights between YaNAO and other cities. It received subsidies from both local and central authorities for providing flights on socially valuable routes. Yamal has also provided some international flights to destinations such as Antalya (Turkey) and Khujand (Tajikistan).

Yamal is wholly owned by YaNAO (through its Department of Property Relations).

In 2022, Yamal’s fleet was 28 aircraft, owned in the following proportions: 20 (71.4%) by domestic lessors, and 8 (28.6%) by EU/UK/US lessors.

Red Wings is a subsidiary of the state defence and technology company Rostec, which is Russia’s largest defence company. Rostec is headed by one of Vladimir Putin’s closest allies, Sergey Chemezov. Red Wings functions as a charter airline.

In February 2022, the sole owner of Red Wings’ shares was Airline Asset Management LLC. 99% of Airline Asset Management LLC was owned by Ilyushin Finance Co JSC, whose largest shareholder in turn (48.4%) was PJSC United Aircraft Corporation, which was controlled by Rostec.

In February 2022, Red Wings’ fleet was 27 aircraft, owned in the following proportions: 11 (40.7%) by the airline, 5 (18.5%) by domestic lessors, 7 (25.9%) by EU/UK/US lessors, 4 (14.8%) by other foreign lessors.

Alrosa Airlines is a wholly owned subsidiary of ALROSA, a diamond mining company. Its main business is to shuttle workers between the diamond mines at Mirny (in the Republic of Yakutia-Sakha) and Moscow. Since 2021 it has also had permission to perform international flights to Uzbekistan.

In February 2022, about 66% of ALROSA (the mining company) was owned by the Russian Federation, the Republic of Yakutia-Sakha and local authorities. The remaining 34% was owned by various legal entities and individuals (presumably mostly private).

In February 2022, Alrosa’s fleet was 6 aircraft. All 6 aircraft (100%) were leased from EU/UK/US lessors.

Nordwind Airlines was founded in 2008 and IKAR Airlines (operated under ‘Pegas Fly’) was founded in 1997. Each operated charter flights in collaboration with the tour operator Pegas Touristik. Since 2018, IKAR has effectively worked as part of a unified group with Nordwind (by selling flights under the Nordwind brand and code-sharing). They have common ownership and management.

Most of Nordwind’s business was initially charter passenger flights from Moscow and other Russian cities to resort destinations in Africa, the Middle East, Asia, Europe, North and Central America. However, it grew to include scheduled international flights, domestic Russian flights (initially to ferry Russian tourists through Russia to central hubs for onward flights, but eventually more generally), and cargo flights.

Nordwind, IKAR and Pegas Touristik were all founded and run by Ramazan Akpinar, a Turkish businessman who owns hotels around the world (and particularly in Turkey). His CEO Igor Shvetsov is also significant in running the airlines. Before Nordwind, Mr Shvetsov had been involved in S7’s charter program.

In February 2022, 95.1% of the shares of Nordwind were owned by Pegas LLC, and the remaining 4.9% were owned by Karine Bukrei (Ramazan Akpinar’s wife). Pegas LLC was wholly owned by Karine Bukrei.

In February 2022, Nordwind and IKAR’s fleet was 58 aircraft, owned in the following proportions: 3 (5.2%) by Nordwind, 49 (84.5%) by EU/UK/US lessors, and 6 (10.3%) by other foreign lessors.

Royal Flight and Blue Connect are part of the OTI Group. Each airline operates charter flights to support the holiday tour operators Coral Travel and Sunmar. These tour operators have their roots in Turkey and are also part of the OTI Group. The airlines transport tourists from Moscow and other Russian cities to international destinations including Turkey, Egypt, Greece, Spain, Thailand, India, Vietnam, and the UAE.

In February 2022, the OTI Group (more recently ‘Coral Travel Group’) was owned by the Turkish businessman Ayhan Bektas.

In February 2022, Blue Connect and Royal Flight’s fleet was 15 aircraft, and all 15 (100%) were owned by EU/UK/US lessors.

I-Fly is a private airline which was established in 2009 to serve the interests of the major tour operator Tez Tour, which has significant Turkish involvements. I-Fly began by transporting tourists from Moscow and other cities to destinations such as Egypt, Turkey, Greece and Spain, and later added other international destinations including China (which became a significant part of its business).

In February 2022, I-Fly’s shares were owned by: Alexander Burtin (56%); the Unox Company, controlled by Vladimir Skoch and Vitaly Vantsev (30%); Silk Way LLC, a company controlled by the Hong Kong company Joy Tour Global Ltd (9%); and Kirill Romanovsky, the CEO of I-Fly (5%).

In February 2022, I-Fly’s fleet was 7 aircraft, owned in the following proportions: 1 (14.3%) by the airline, 5 (71.4%) by EU/UK/US lessors, and 1 (14.3%) by other foreign lessors.

NordStar was created in 2009 by Norilsk Nickel, a large nickel miner. NordStar’s operations connect Norilsk to Moscow and Krasnoyarsk. Its primary goal is to facilitate transport for Norilsk Nickel’s employees. It is a small airline which carries about 1 million people a year.

In February 2022, NordStar was wholly owned by Norilsk Nickel. However, on 25 March 2022, 100% of NordStar’s shares were sold to its management, headed by General Director Leonid Mokhov. This was likely due to the risk of sanctions against Norilsk Nickel. NordStar probably continues to depend heavily on Norilsk Nickel.

In February 2022 NordStar’s fleet was 10 aircraft, owned in the following proportions: 1 by the airline (10%), and 9 by EU/UK/US lessors (90%).

Smartavia is the heir to the Arkhangelsk-Syktyvkar Air Line Directorate established in 1929.

Smartavia is a low-cost airline which focusses on domestic routes. Pre-COVID-19 it operated 85% of its flights on domestic routes, and following the Russian invasion of Ukraine it has served only domestic routes.

Since April 2021 Smartavia has sought to be the first smart low-cost airline in Russia. As part of a new five-year strategy, it intended to receive 40 new Airbus A320 NEOs with 180 seats and LEAP-1A engines, delivered directly from the factory. It intended to expand its route network and serve 16 million passengers annually by 2025, becoming one of the largest five air carriers in Russia. These plans were frustrated by the invasion of Ukraine.

Smartavia was known as Nordavia between 2009 and 2019. Nordavia was owned by Norilsk Nickel until 2016. In 2016 Sergei Kuznetzov and his family acquired Smartavia, both directly and through an investment vehicle (JSC Sky Invest). Sergei Kuznetzov also co-owned Red Wings between 2013 and 2016, when it was acquired by Ilyushin Finance Co.

In 2017 it was announced that Red Wings (by that point ultimately controlled by Rostec) and Smartavia would merge, although in the event it appears that the respective shareholders preferred an alliance with some shared management functions. As of February 2022, Smartavia was owned by JSC Sky Invest.

In February 2022, Smartavia’s fleet was 14 aircraft, owned in the following proportions: 12 (85.7%) by EU/UK/US lessors, and 2 (14.3%) by other foreign lessors.

ABC was founded in 2005 and became the largest Russian cargo airline. Its route network covered more than 30 destinations around the world and carried out transportation through its cargo hubs based at Sheremetyevo (Moscow), Novosibirsk, and Krasnoyarsk airports. The majority of ABC’s customers were in North America, Europe and Asia.

ABC has not operated any of its aircraft since March 2022.

In February 2022 ABC was controlled by Volga-Dnepr-Moscow LLC which was 100% owned by Volga-Dnepr Logistics B.V., registered in the Netherlands. 49% of ABC was owned by Volga-Dnepr Logistics B.V. The shareholders in Volga-Dnepr Logistics B.V. were Aleksey Isaikin (75%) and his closest associate Sergei Shklyanik (25%). ABC is thus part of what is termed the Volga-Dnepr Group, or ‘VDG’.

In February 2022 ABC’s fleet was 18 aircraft, owned in the following proportions: 6 (33.3%) by the airline, 2 (11.1%) by domestic lessors, 6 (33.3%) by EU/UK/US lessors, and 4 (22.2%) by other foreign lessors.

Atran is another cargo airline and also part of the VDG.

Whereas ABC specialised in transcontinental cargo transport between the USA/Northern Europe and South-East Asia, Atran specialised in cargo transport between Russia and China (occasionally between Russia and Europe) and domestic distribution of cargo delivered from China.

In February 2022 Atran’s fleet was 8 aircraft, owned in the following proportions: 1 (12.5%) by the airline, and 7 (87.5%) by EU/UK/US lessors.

While none of the claims in this action involves an aircraft or engine leased to it, it is helpful also to mention Azur Air, which featured in the evidence called.

Azur Air has existed in its current form since September 2015, when UTair sold its whole stake in the Katekavia charter airline (which operated under the Azur Air brand). Since then, Azur Air has been a strategic partner of the Turkish tourist operator Anex Tour, which was founded in Turkey in 1996, and entered the Russian market in 1998.

Azur Air is the largest Russian charter airline. It operates tourist flights to Turkey, Thailand, Spain and other destinations. However, during the COVID-19 pandemic, the airline increased its cargo and passenger traffic in the domestic market.

In February 2022, Azur Air was independently owned by One2Fly LLC. One2Fly LLC was owned by the Russian citizens, and sisters, Anna Fukalov (55%) and Natalya Koçkar (45%). Natalya Koçkar’s husband, Rustem Koçkar, is a co-owner of Anex Tour. His co-owners are Serhat Koçkar and Neset Koçkar.

In February 2022, Azur Air’s fleet was 34 aircraft, owned in the following proportions: 4 (11.8%) by the airline, 30 (88.2%) by EU/UK/US lessors.

Although the categorisation does not answer any of the important questions in these actions, it is in some ways helpful to think of these 18 lessees as falling into the following groupings.