“Europe has repeated the same mistakes it made 80 years ago when it brought up Hitler on its head. Now it has brought up another dictator”, Vladimir Belotkach said.
Because of the war with Ukraine and the state of the Russian economy, the aviation industry is facing deep stagnation caused by sanctions against the Kremlin. Russia has gained a bad reputation for stealing $10 billion worth of aircraft, and its planes have become non-grata at international airports. So says Professor Volodymyr Belotkach of the Singapore Institute of Technology.
He was born and raised in Kyiv. He studied at Kyiv-Mohyla Academy and researched the transatlantic market, competition, and alliances between airlines in Arizona. I have taught economics in California and the UK. In Pristina, where we met, he was conducting training for the Kosovo Air Navigation Service.
Our conversation with the expert began with how the war with Russia affected the aviation industry’s development in Ukraine.
– Ukraine‘s international airlines were developing dynamically, although they had some problems even before the full-scale war,” he says. – There were plans to turn Kyiv into a kind of a hub between Europe and Asia, and before 2014 there were interesting developments in that direction. Recall that most of the passengers on the Ukrainian Boeing 737 that was shot down near Tehran in 2020 were flying from Tehran to Toronto via Kyiv. That is, it was already working bit by bit as a transit hub. But Russia’s seizure of Crimea made further development in this direction impossible. The closure of Russian airspace after the annexation of Crimea made it impossible to develop a network of flights to Asia.
The Ukrainian air navigation system was well integrated into the European system and has been for a long time. Ukraine is a member of the European Air Navigation Safety Organisation, Eurocontrol. Moreover, the market between Ukraine and the European Union has been quite liberalized. Budget airlines used to fly not only to Kyiv but also to Odesa, Lviv, Kharkiv, and Donetsk. Ukrainian airports had direct flights to many European cities, and we were on our way to full integration with the European aviation area. But the war ended when Russia attacked Ukraine on February 24.
Where did the news of the outbreak of war catch you?
– I was working at my home in Singapore. Suddenly, I saw messages on Facebook from friends waking up to explosions at five in the morning. My wife did not believe at first that war had broken out at first. My parents live in a village near Bucha. They stayed at home until rockets started flying over their heads from the neighbouring forest. The same day they left, Russian troops occupied the village. Two people were killed in the shelling, but the village was not as badly damaged as Bucha and Hostomel.
The amount of damage Russia has done to Ukrainian towns is in the hundreds of billions of dollars. Where can Ukraine get this money?
– I hope it will be possible to get some of the Russian funds that are now blocked. Of course, this is not very easy from a legal point of view because property rights are respected in the West. The West became the West, among other things, because of respect for property rights, and everything must be legally documented. All the crimes of the Russian occupiers must be documented. Perhaps Ukraine will also have to file a lawsuit. Russia will also be given the opportunity to defend its point of view. The court must be legitimate, as much as we want to punish the Russian Federation for its crimes. The procedure must be followed, otherwise, we might not be understood in the West.
The United States, the European Union, and Western countries will provide some of the funds. To a certain extent, it is also in their interests because many contracts will go to their own companies, and this money will return to their economy.
What will happen after Russia refuses to give the lessors back the 400 planes that were stolen from foreign countries?
– It is quite an interesting situation. I don’t know how they will get out of it. If in a few years, after Russia’s proper, hopefully, defeat in this war, Russia wants to somehow get back into the aviation community, we may get a few hundred aircraft that the regulator will not consider fit for service. Russian companies can’t get parts; their mechanics are no longer qualified. The European Aviation Safety Association has withdrawn all the qualification licences it granted in Russia. As a matter of fact, all these planes would be unserviceable from the point of view of Europeans and Americans.
Then the question arises: what is Ukraine to do with them?
– Aircraft is one thing. The main thing is to be able to carry Russian funds into Ukraine. It is, above all, more than 300 billion dollars in assets of the Central Bank, which are now blocked by the Europeans and Americans. The main battle will be over these funds. As for Russian aviation, the leasing companies will not want to deal with it. I think Russia will suffer the consequences of its ruined reputation for decades.
Russian airlines do find ways to fly abroad, though. For example, Aeroflot now flies to Tehran, and Iran will not allow those planes to be confiscated by leasing companies. The Russians fly to Delhi and everywhere else they can reach. I flew to Pristina via Istanbul and saw a flight to Minvody by some small Russian company on the board. Turkey has not closed its airspace to Russian airlines, so they can operate such flights.
But what Russian airlines are capable of now is minuscule compared to what they used to do. For example, in 2019, we were holidaying in Phuket for the New Year and stayed close to the airport. Almost a third of the flights there were from Russia. Currently, there are only a few left.
By my calculations, there are about a thousand planes on Russian airlines. About 70 leasing companies have managed to get their property back. At the time sanctions were announced, these planes were abroad, and they were quickly seized.
But still, they have about 900 aircraft. I think they will need no more than half of them. The other half will be taken apart for parts. And the half that will remain flying will be unsuitable for international airlines. Moreover, foreign airlines will not be able to get their passengers onto them. Russian airlines are now on the EU “black list”. It’s a list of companies that are banned from flying to the EU countries precisely for aviation safety reasons.
How effective do you think economic sanctions against Russia are? And why is the EU hesitant to completely abandon Russian gas?
– Of course, the most effective thing in the current situation would be energy sanctions. We are talking about an embargo on the sale of oil and gas. The EU countries must unanimously agree on that. Even Hungary has now taken this route. So many international companies that had good, well-paid employees are leaving Russia. Their demarche will be a blow to the Russian economy. There are estimates that the Russian GDP might shrink by 12 to 20 per cent. It’s quite a tangible blow to the economy. Many will lose their jobs and their families’ budgets. Still, the sanctions will be tangible for Russians but not fatal.
Will the Ukrainian aviation industry be able to reach the pre-war level?
– Absolutely. Of course, much depends on the development of the economy itself. Infrastructure restoration will generate a lot of jobs. The Ukrainian economy will be better integrated into the European and global economies. After this war, Ukraine will finally be accepted into the civilized world. Unfortunately, we have to prove to the world that we have the right to exist this way. At the same time, there are some idiots telling us that we have to cede territory and so on. My good friend Timofey Milovanov, president of the Kyiv School of Economics, says: that now the whole world is still thinking about how to understand Putin instead of stopping him.
Where do you think Russia will stop?
– Where it will be stopped. It is a shame that Europe has repeated the same mistakes it made 80 years ago when it brought up Hitler on its head. Now it has nurtured another dictator. Perhaps this happened because the Europeans did not consider the Putin regime to be a direct threat to Europe. They still do not understand that Putin’s plans do not end with Ukraine.
Ukraine has to stop Rashism [Russian fascism] with Western weapons. But it is bitter that the Ukrainians have to do the bulk of the work in this war. Of course, sanctions against Russia’s energy industry would help us a lot. However, unfortunately, there is no consensus yet. The Americans have stopped buying Russian oil, and it is no secret that the US has its own interest in redistributing the global energy market. The opportunity to exploit the crisis to its own advantage should not be missed. Moreover, the Americans will increase their influence in Eastern Europe. It will be essential for them as well.
How’s China going to feel about it?
– China, it seems to me, is now waiting to see whose body will float down the Amur River. At first, they thought it would be the corpse of Ukraine, but now, hopefully, they understand more and more that it will be the corpse of Russia. I would really like to know what Putin talked to Xin Jinping about when he went to Beijing before invading Ukraine. Very interesting to know what he said and what he heard in response. Perhaps some sort of non-aggression pact was signed there. Since Russian troops are at war in Ukraine, the Chinese can take their former territories in the Far East with their bare hands. But right now, China is just waiting. China probably doesn’t really want to cooperate with the Russians and is watching the reaction of the West, especially the United States.
China is playing its own game. However, what is happening in China itself makes one wonder whether Jinping will hold on to power going forward. The latest developments in the Middle Kingdom, in particular the coal shortages and constant lockdowns that people are less and less happy about, are indicative of that.
And what was the reaction to Russian aggression against Ukraine in Singapore?
– Singapore has condemned Russia’s attack on Ukraine and imposed certain economic sanctions against the Kremlin. It is almost the only country in the Association of Southeast Asian Nations (ASEAN) that has actually expressed a very clear and ambiguous position on this issue. Every time I have an opportunity to communicate with Singapore’s government representatives, I thank them for it.
For certain reasons, the activities of the Ukrainian diaspora in Singapore (and they are several hundred people) are not too visible. Demonstrations are forbidden in this country, so there are no flag demonstrations. After the war began, we organised a meeting at the Ukrainian embassy in Singapore, and the ambassador spoke to us about what was happening on the diplomatic front. The Ukrainian community there rallied against the backdrop of these events. The Ukrainians in Singapore have set up a Sunday school for children; many are trying to switch to the Ukrainian language.
Even though I have a British passport, my family and I consider ourselves Ukrainians. My wife is from a Russian-speaking family, and we have spoken Russian for most of our lives together. Now we have switched to Ukrainian. I believe that after the victory, Ukraine has all chances to revive. If we want to change the country at the level of basic institutions, there is no better time than after the war.