Potential effects of US/EU sanctions on Russian Aviation

Jack1985

Proposals on the next round of US sanctions as well as EU sanctions are to vary from banking to deliveries from Airbus and Boeing to the Russian Federation. This is a potentially serious move which could mean, taking Aeroflot as an example, that orders of 96 aircraft from Boeing/Airbus could be suspended including existing aircraft maintenance arrangements and aircraft part supply/replacement.

It is believed this would be in response to Russia saying it would cut off supplying materials to Boeing which could seriously effect its delivery programme if such a move by Russia proceeds. Airbus would remain unaffected by any Russian sanctions.

There are fears, just Boeing directly would lose close to $100bn if these sanctions proceed and that excludes the massive rise in costs if Russia (almost guaranteed) blocks sales of parts to Boeing.

What are people's opinions? There seems to be two scenarios that will happen in particular to aviation after this, huge losses for Boeing, far less so for Airbus and that excludes what would happen if the Russian economy collapses as analysts are fearing if these latest sanctions proceed.

whitebriar

The sanctions will not affect any existing orders or contracts.
Only future ones not yet signed.

ted1

I'd be more worried about the gas supply being turned off.

Russia needs a good slap, it's now being accused of testing a nuclear missile by the USA. We all need to take a bit of pain to make this work the last thing we need is another rogue nation doing it's own thing.

The manufacturers will complain but tough be smart get in there and over order the parts now and get them shipped so down time is minimised.

ted1

ted1 wrote: »

I'd be more worried about the gas supply being turned off.

It's time we looked elsewhere for our energy sources, like oil the source is in volatile regions and the net effect is we pay way more than we should have to for it. Hence the reason why we are STILL paying fuel surcharges on our airfares.

Tenger

Deleted User wrote: »

Russia needs a good slap, it's now being accused of testing a nuclear missile by the USA. ......

Russia may well be out of line but the USA is very quick to accuse them when they themselves have done the same elsewhere.

fr336

ted1 wrote: »

I'd be more worried about the gas supply being turned off.

I thought these parts were quite self sufficient on the whole? Yes Russia switching it off and for a prolonged period wouldn't be good at all, but I'm not sure it's as bad as the general consensus is... I am speaking from England though - I just assume Ireland is around about the same situation with some of that supply coming from us.

smurfjed

Fr336, some European countries obtain up to 100% of their required gas supplies from Russia, so it will create significant hardship if the supply is cut off for a significant period.

fr336

smurfjed wrote: »

Fr336, some European countries obtain up to 100% of their required gas supplies from Russia, so it will create significant hardship if the supply is cut off for a significant period.

Well they know that'd be war after not long so....

roundymac

smurfjed wrote: »

Fr336, some European countries obtain up to 100% of their required gas supplies from Russia, so it will create significant hardship if the supply is cut off for a significant period.

Yes it will be interesting. AFAIK Germany gets most of it's gas from them.

Jack1985

Here's the countries effected by a cut-off in gas from Russia:



I actually agree with GVHOT, if you ask any industry analyst about purchasing gas/oil the worst country to deal with is Russia for three reason volatility on price, consequences of using there gas/oil (Fuel surcharges) and unreliability of its future supply. Also it's not like countries are going to go dark all of a sudden should Russia switch of the Gas, there would be shortages. And anyone honestly thinking Russia would switch off its gas supplies and bankrupt its own country overnight is well, pondering to the spin that the media would have you believe.

Obama is expected to announce the latest round of sanctions within the hour.

The sanctions will not affect any existing orders or contracts.
Only future ones not yet signed.

That was the case until Russia made its recent threat regarding cutting of supplying parts to Boeing, then the State Department in the US said it was reviewing ''severing existing'' agreements.

AFAIK Germany gets most of it's gas from them.

Incorrect although it is high.

fr336

roundymac wrote: »

Yes it will be interesting. AFAIK Germany gets most of it's gas from them.

The leaders of Europe. It'll all be fine. Russia just like to push limits these days that's all they do.

fr336

Jack1985 wrote: »

Nil for the UK (and Ireland)?! If that's true it shows just what a bunch of constant liars the UK media are...getting the public whipped up about Russia turning off the gas. The media here is so dangerous.
Nil? I can't believe it.

Jack1985

fr336 wrote: »

Nil for the UK (and Ireland)?! If that's true it shows just what a bunch of constant liars the UK media are...getting the public whipped up about Russia turning off the gas. The media here is so dangerous.
Nil? I can't believe it.

The media are the same here but to be fair if for example they do shut of the gas (it would only be temporary and very, very unlikely) there would be a shock to the major EU states including Germany, Italy and Spain - So that would effect us in Ireland and the UK to an extent. But ya, isn't ''hype'' part of the media's DNA especially in the UK? Ala Daily Mail.

Obama to walk out onto the White House lawn shortly with his latest sanctions, I used to like the guy - He's looks more like a warmongering idiot these days, complete failure of a president.

fr336

Jack1985 wrote: »

Obama to walk out onto the White House lawn shortly with his latest sanctions, I used to like the guy - He's looks more like a warmongering idiot these days, complete failure of a president.

You seem much more clued up than me on politics (and plenty more) but Obama strikes me as only doing such things when he really has to. Imagine if it was a Republican nut in there when the Syria business was huge on the agenda...the UK were chomping at the bit to go in there (and not for nice reasons if you ask me), I know it was the UK parliament that eventually stopped their mad government but I feel like Obama was relieved that happened?

Jack1985

fr336 wrote: »

You seem much more clued up than me on politics (and plenty more) but Obama strikes me as only doing such things when he really has to. Imagine if it was a Republican nut in there when the Syria business was huge on the agenda...the UK were chomping at the bit to go in there (and not for nice reasons if you ask me), I know it was the UK parliament that eventually stopped their mad government but I feel like Obama was relieved that happened?

I don't know more than you at all, just am Interested in this particular subject - I was actually in the US on my J1 in Cali during Obama's inauguration and actually thought he was a whole new type of politics needed in the US, he's proved to be very similar to the delinquent before him. Obama is exactly as you say an opportunist but that's how US politics works for the Democrats - The Republicans are the biggest nuts you could have in office, I have no doubt had Romney got in the US would be in Syria and supporting Israel's current offensive and that excludes the toy's out of the pram reaction they would have had to MH17. You are right, Obama was the first US President in history to ask Congress to go into Syria - It never materialized. Cameron's pursuit of invading Syria, I never understood. The problem here is these situations do not require invasions and prolonged war which results in the destruction of countries completely, just look what the US and Europe have done to Libya. The UN should have gone into Syria, all parties should have been seeking a ceasefire like they are now between Israel/Gaza. Regards MH17 I want Russia to be taken to account, it is absolutely clear separatists rebels fired a rocket they got from Russia, the US may have history (including the Iran Air flight) but Russia's immediate response was pitiful and disgusting. By asking for accountability shouldn't mean war, why can't politicians get there heads around, seeking accountability through mediation rather than through weaponry? It's the near knee-jerk reactions by the US/UK into Syria that should be avoided but it continues to happen unfortunately. Thankfully the UK's citizens and MP's have had enough after Tony Blair, so that rules the UK out of future conflicts to back up the US in whatever new agenda comes to push.

Jack1985

So in the latest sanctions imposed between the US/EU nearly every industry bar Aviation has been targeted, looks like the Russian counter-threat was enough to get Tacoma Congressmen to put a word in about Boeing.

If Russia's gas is cut off, it will affect us, Germany etc will immediately start looking for alternates and that source will be ours. We will be left without as Germany etc will pay what would be demanded for the gas to flow to them.

If only they could get some companies to invest properly in our fields to get the gas/oil out.

Jack1985

Deleted User wrote: »

If Russia's gas is cut off, it will affect us, Germany etc will immediately start looking for alternates and that source will be ours. We will be left without as Germany etc will pay what would be demanded for the gas to flow to them.

If only they could get some companies to invest properly in our fields to get the gas/oil out.

You really think our suppliers are going to erode long-term contracts and open themselves for massive lawsuits by the state (multiple states)? Russia isn't going to cut off the gas supply to Europe, maybe it will to Ukraine but not to Europe. It would literally be Russia turning off its economy overnight, the whole Russian system would collapse, simple, there is no way of hiding that in the 21st century - That's why the EU/US are doing this, the Russians however big there statements can't revoke the supplies - The Russians years back may have viewed getting lots of European countries dependent on there supplies as a leverage but it's come full circle into how important it is to their country and the catastrophic consequences if countries are blocked access and it has no gas to sell. That's really what happens when an ex-KGB maniac is installed as a de facto dictator in a country which created its own version of ''democracy'' in the late 90's.

comongethappy

The newly capitalist Russia is far more fragile than people may assume.

When the west first threatened sanctions last march, they had to sell 10% of their gold reserves & initiate emergency interest rate cuts to save the rouble..... That was day 1.

The west chickened out & the markets readjusted.....

Time will tell if they have the grapes to take it to Russia properly this time.
'No ' would be my guess.

fr336

How far will Putin push things? Or is he more raving than I gave him credit for?

comongethappy

fr336 wrote: »

How far will Putin push things? Or is he more raving than I gave him credit for?

He won't have to.

Europe has no bottle or is more obsessed with the parochial to care.

A new status quo emerges & the world keeps turning.

fr336

fr336 wrote: »

How far will Putin push things? Or is he more raving than I gave him credit for?

He'll push a bit more as Europe are giving the wrong impression at the moment that we are scared to make any hard decisions.

St. Leibowitz

David McWilliams wrote an interesting piece on this.

http://www.davidmcwilliams.ie/2014/07/21/deadly-game-of-human-chess

The whole Crimea thing was kicked off by Ukraine turning towards Europe and away from Russia. His thesis is that that this is similar to an independent Scotland suddenly aligning with Russia. It just wouldn't be allowed to happen. But more interesting, and sort of back on topic, he reckons that the current Europe is last century. This century, the most logical economic alignment is a German/Russian one. And there're signs of that starting. Fascinating times ahead.

comongethappy

St. Leibowitz wrote: »

David McWilliams wrote an interesting piece on this.

http://www.davidmcwilliams.ie/2014/07/21/deadly-game-of-human-chess

The whole Crimea thing was kicked off by Ukraine turning towards Europe and away from Russia. His thesis is that'll that this is similar to an independent Scotland suddenly aligning with Russia. It just wouldn't be allowed to happen. But more interesting, and sort of back on topic, he reckons that the current Europe is last century. This century, the most logical economic alignment is a German/Russian one. And there're signs of that starting. Fascinating times ahead.

Ukraine sought to improve trade with neighbouring European states.

How dare they!
The audacity of a country daring to better its economy through mutual trade..... Hanging is too good for them.

Don't they know they must forever be under Russia's thumb?

The implication that a newly independent Scotland having a trade deal with Russia would spark a military conquest of Scotland is equally silly.

St. Leibowitz

comongethappy wrote: »

Ukraine sought to improve trade with neighbouring European states.

How dare they!
The audacity of a country daring to better its economy through mutual trade..... Hanging is too good for them.

Don't they know they must forever be under Russia's thumb?

The implication that a newly independent Scotland having a trade deal with Russia would spark a military conquest of Scotland is equally silly.

Did you read the article, or answer based on my very brief synopsis ? He didn't mention Scotland having a trade deal, but the idea of the Scottish Nationalists being funded by Russia, and setting up what the West would consider a puppet governenment in Edinburgh.

comongethappy

St. Leibowitz wrote: »

Did you read the article, or answer based on my very brief synopsis ? He didn't mention Scotland having a trade deal, but the idea of the Scottish Nationalists being funded by Russia, and setting up what the West would consider a puppet governenment in Edinburgh.

The likelihood of his equivalent scenario in Scotland is so fantastically low with assumed outcomes & reactions it isn't worth using as an equivalence.

He builds a strawman & not a very good one.

Tenger

Well its a question of "areas of influence". The Scotland example is not a very good one but it was only made for arguments sake. It was an attempt to portray the view of some sections of the Russian population and govt.

Look back to the 1950's and see the response of the USA to Cuba embracing Communism under Castro. Similarly look at Panama and Grenada.

Russia is seeing what was previously seen as a close neighbour being absorbed into the USA/EU/NATO camp. Add that to Latvia, Lithuania, Estonia, Kazakhstan, Tajikistan, Poland, Hungary etc

Ukraine has always been in the Russian sphere of influence, well before Soviet times. It has always been an ethnically divided country. I remember reading a treastise about 6-8 years ago predicting that Ukraine would eventually split along ethic lines.

Jack1985

Hitler himself has lost the run of himself today, confirming that he plans to block EU aircraft overflying Russia to/from Asia as well as banning foods from the EU/US and CA/AUZ.

Simple move from the EU/US here, ban Aeroflot.