“Steer straight ahead, it’s still far ahead. There, where the Volga-Dnepr Airlines is stationed.”
“There, where our future aircraft are?”
“Yes, yes, that’s right.”
Such a dialogue took place in May among Ukrainian pilots of Antonov Airlines during landing in Toronto. It’s on this aerodrome that the arrested An-124 Ruslan of the Russian company Volga-Dnepr has been standing idle for the second year. In terms of size and power, this aircraft has no equal in the global cargo transportation market. During Soviet times, 55 Ruslan airplanes were manufactured, half of which are still actively flying. After the collapse of the USSR, the Ukrainian State Enterprise Antonov inherited seven of such aircraft.
Currently, together with the Ministry of Justice and the Ministry of Foreign Affairs, the enterprise is doing everything possible to significantly increase the Ukrainian An-124 fleet, by confiscating one Russian Ruslan in Canada and three more in Germany.
For now, these Russian aircraft are parked on airfields, gathering dust and accumulating parking debts. However, Ukraine can compel them to contribute to reconstruction efforts and help strengthen Europe’s defense capabilities. The unique Ukrainian aircraft have been transporting military cargo for NATO for many years. With Europe currently undergoing rearmament, the demand for such transportation has significantly increased. But will the confiscated aircraft be used?
Return to the homeland harbor
The fact that the Russian An-124 Ruslan ended up in Canada is an incredible stroke of luck. The major war had been ongoing for three days already, and the West was preparing to impose sanctions against Russia. However, the private company Volga-Dnepr Airlines decided to take a risk — to transport Chinese express Covid-19 tests to Canada and return back.
The aircraft landed at Toronto International Airport on February 27. A few hours after landing, Canada closed its airspace for Russian aircraft. Now the aircraft won’t be able to take off until the sanctions are lifted. The Russian crew of the An-124 was told to pack their bags and go home, while the aircraft remained in Canada. The only thing the owner of this Ruslan can do now is pay for parking and hope for a swift end to the war.
According to the Canadian publication blogTo, Volga-Dnepr Airlines has to pay $1,065 per day for the aircraft’s idle time. Currently, the parking debt amounts to $560,000.
A similar fate befell three more An-124 aircraft of the Russian company in Germany. Two of them arrived in Leipzig shortly before the invasion, while another one has been sitting there without engines for a while. The German aviation hub also issues substantial bills for parking: the amount has exceeded a million dollars. However, according to Bild, Russians are paying these fees. Presumably, Volga-Dnepr hopes that Germany will keep its aircraft until the end of the war.
Ukraine immediately set its sights on the aircraft in Canada and Germany. In April 2022, the Sviatoshynskyi District Court of Kyiv City issued an ex parte arrest warrant for all 12 Ruslan aircraft of the company Volga-Dnepr Airlines. The legal basis for this action didn’t require extensive searching: the decision is tied to a long-standing dispute with the Russian operator.
The essence of the dispute lies in the fact that the An-124 aircraft need to be periodically inspected and their operational lifespan officially extended. According to international norms, only the developer company has the right to do this, namely the State Enterprise Antonov. However, the Russian operator Volga-Dnepr had a falling out with “Antonov” and in 2018 independently extended the aircraft’s operational term.
Lawyers from Antonov consider the Russian certificate to be a forgery and warn that this could endanger flight safety. The conflict became the basis for the ex parte arrest of the aircraft and their transfer to the state agency Asset Recovery and Management Agency. The most challenging part remains: convincing Western partners, confiscating the Ruslan planes and handing them over to Ukraine. Besides the mentioned legal case, Ukraine emphasizes its moral right to obtain these aircraft as compensation for the destruction caused by Russians.
Confiscating Ruslan airplane in Canada will be simpler. It is the only allied country that has enacted a law for the confiscation of Russian assets and their transfer to Ukraine. In the spring, Canada imposed sanctions on Volga-Dnepr Airlines, and on June 10, an arrest warrant for the aircraft was issued. On the same day, Prime Minister Justin Trudeau announced the beginning of the process of confiscating this asset.
The political will for this decision exists, but the confiscation has not yet taken place: pre-trial procedures and filing of lawsuits are ongoing. The duration of the trial and appeals is unknown. Currently, in Canada, no court cases regarding Russian assets have been concluded under the new law. Similarly, the form in which Ukraine will receive this asset is unknown.
“According to Canadian confiscation law, the subject of transfer to Ukraine could be not the confiscated property itself but the amount that does not exceed the net proceeds from its sale. And these funds could then be directed to the victims,” noted Deputy Minister of Justice Iryna Mudra.
According to her, Ukraine is consulting with Canadians regarding the possibility of transferring the aircraft.
Finding a buyer for it is not easy. If relying on the contract for the purchase of An-124 by the UAE in 2004, this aircraft could cost around $60 million. Besides Russia and Ukraine, there are only two other operators of the An-124 Ruslan in the world: Azerbaijan and the UAE, each possessing one such aircraft.
Understanding that the confiscation of these aircraft has gained momentum, Russians began to threaten. Russian diplomats referred to the potential confiscation as robbery. In reality, the “response” should come from Western countries, as Russia began the confiscation of hundreds of aircraft belonging to European leasing companies back in 2022.
“An adequate response from the EU could help compensate for the losses both to Ukraine and the affected Western companies. Besides Ruslans, there are seven more aircraft of the Volga-Dnepr company stuck on German airfields, worth hundreds of millions of dollars, which could be confiscated for the benefit of the affected parties,” stated Dr. Oksana Yurynets, a professor of economics.
To make this happen, appropriate laws are needed. Germany has not yet enacted acts for the confiscation of Russian assets due to the ongoing war. They can only seize property for violations of German criminal laws.
According to Iryna Mudra, the confiscation of Russian aircraft could potentially occur due to violations of international certification rules, which is why Antonov had previously taken the matter to court. They could be seized on behalf of the German government under a criminal case and then transferred to Ukraine.
Back in 2022, after the ruling by the Sviatoshynskyi District Court of Kyiv City, the decision to arrest the aircraft was communicated to Western partners. However, significant progress in this matter has yet to be seen. Clearly, a more universal method of confiscation needs to be explored to avoid losing the case in court.
According to sources from the European Parliament, in April, the leadership of the State Enterprise Antonov reached out to the Ministry of Foreign Affairs seeking ways to confiscate the Russian aircraft in Leipzig, as at that point, even the German law enforcement agencies did not have a position on this matter. Likely, further progress will depend on the political will of the German authorities. Meanwhile, the EU has not even imposed sanctions against the company Volga-Dnepr Airlines.
The appeal from Antonov also mentions that the Russian Ruslan aircraft could be in the possession of Sberbank as collateral. However, the potential claim of ownership of these aircraft by the Russian state bank should not hinder the confiscation, as Sberbank itself is subject to Western sanctions.
How the aircraft will help Ukraine and the EU
The best-case scenario would involve four aircraft being transferred to Ukraine and subsequently to Antonov Airlines. In this scenario, everyone wins except Russia. Volga-Dnepr and Antonov had a longstanding joint contract for transporting NATO military cargo under the SALIS program. However, Russians withdrew from the project in 2018, and since 2022, their aircraft have been banned from flying in G7 countries.
France, Germany, and many other countries need a reliable carrier with a substantial fleet of aircraft, and finding an aircraft suitable for heavy military and humanitarian cargo is challenging. Antonov”could step in and take on these transportations. Antonov possesses seven An-124 aircraft, five of which are based in Leipzig and continue to fulfill NATO orders and civilian flights. The confiscation of the Russian Ruslans could potentially expand the Ukrainian An-124 fleet, and consequently, the fleet of large transport aircraft for European armies.
Ukrainian An-124s have always been aircraft of rescue during “dark times.” In 2018, they transported generators and transformers to the USA after a hurricane, in 2020, they carried medical equipment, and in 2021, they evacuated German soldiers from Afghanistan.
As military tension grows not only in the European region but also in African and Asian countries that are EU partners, additional transport capabilities in Europe would be invaluable. Ultimately, these aircraft could transport weapons for the Armed Forces of Ukraine to Polish airfields.
Furthermore, airlines are the primary source of funding for the State Enterprise Antonov. Each Ruslan could generate several million dollars in profit annually. Acquiring the Russian aircraft with a total value of over $240 million would partially offset the losses suffered by the enterprise due to the aggressor’s actions.
Russians destroyed infrastructure at the Antonov base in Hostomel worth $1 billion. The enterprise needs to secure funds for the restoration of damaged aircraft like An-12, An-22 Antei, An-28, An-132, and An-124 Ruslan, as well as for the reconstruction of the world’s largest aircraft, the An-225 Mriya.
Confiscation for Ukraine and transformation into a logistical support for NATO is a much better fate for the aircraft than if they were to rust away on airfields. In order to remain flight-worthy, the An-124s need to undergo checks and repairs periodically. In contrast, Russian Ruslans have been sitting idle under the open sky for the past two years. If the aircraft are brought back into operation in a timely manner, they could serve until 2040.
How long do we have to wait?
The confiscation of the aircraft could set a precedent for the seizure of other Russian assets for the benefit of Ukraine. However, the problem lies in the absence of legal mechanisms similar to those in Canada.
The US, the European Union, and the UK have to come up with various legal “loopholes” so that Ukraine can at least make a claim on certain assets. Such selective confiscation is not promising, as it requires a series of conditions, such as the asset owner having committed criminal offenses.
The legal mechanism should compel Russians to pay for the damages inflicted on Ukraine. In other words, legal actions should be taken against companies and their owners involved in the aggression, rather than for tax evasion, debts, money laundering, and other offenses. Russian businessmen do not violate enough European laws to confiscate even a quarter of their assets in this manner. The rules need to be changed, and new mechanisms need to be implemented, rather than searching for loopholes in the existing legislation.
According to the Ministry of Foreign Affairs, Germany joined the creation of the Register of Damage in May. However, this will make no sense unless hundreds of billions of dollars are found for compensating the victims of Russian aggression. Currently, Russian giant aircraft remain on airfields, and oligarchs’ yachts are in bays, losing their value and reminding us of the government’s tolerance for the crimes of Russia.
Originally posted by Bohdan Miroshnychenko on Economichna Pravda, translated and edited by the UaPosition – Ukrainian news and analytics website
