Why Aeroflot’s New Airbus A350s Are Registered In Bermuda

When our team at Simple Flying reports on aircraft deliveries and incidents, we’re fairly used to the idea that an aircraft’s registration markings will match with the country of the operating airline. Strangely, however, some of Aeroflot’s aircraft – such as its brand new Airbus A350s are registered with the VQ prefix of Bermuda, rather than the ‘RA’ denoting the Russian Federation. What’s the reason for this peculiar occurrence?

One common thread that runs through many of our articles is that aircraft registration codes are mentioned. These codes are one of the primary ways to uniquely identify a particular aircraft apart from other aircraft of the same type, flying for the same airline.

According to the International Civil Aviation Organization (ICAO), what we call aircraft registrations are technically known as Aircraft Nationality and Registration Marks and have been set by the ICAO to comply with Articles 17 to 21 of the 1944 Chicago Convention.

Why are jets flown by Russian airlines registered outside of Russia?

You may already know that it’s not just Aeroflot’s newest Airbus widebody that is registered in Bermuda. Nor is it just Aeroflot aircraft. Take a look at the long list of S7 and Pobeda A320s and 737s, and you’ll see a lot of VP and VQ prefixes denoting Bermudan registration. A break from ‘the norm,’ Rossiya’s 777s are registered in Ireland having the EI prefix.

According to Russian Aviation Insider, in 2017, out of 743 foreign-made aircraft in service, only 133 (including 123 with less than 50 seats) were registered in the country.

An AIN Online article notes that there are several reasons why Western-built aircraft are registered abroad, and Russian airlines may have factored in several or all of the below reasons in their decision-making process:

• Russian carriers avoid high import taxes.
• For the jets being leased, aircraft financiers and lessors traditionally refrain from Russian registration due to questionable airworthiness standards.
• The Russian political climate may add another level of uneasiness.
• The ability of the relevant Russian authorities to communicate (with lessors and financiers in English was also a raised issue.

Speaking with AIN, an aviation and assets finance lawyer said the following:

“I can accept that lessors should be careful…There are discrepancies between the Russian airworthiness rules and practices and these of the FAA and EASA…It is technically possible; there are examples of Russian airlines flying Boeing or Airbus aircraft under the Russian flag.” -Victor Snegirev, AviaLegalServices via AIN Online

Another significant reason for the overseas registration is the simple fact that, up to this point, the Russian government has allowed the practice. But this will change in the future…

This will change eventually

Russian Aviation Insider notes that for several years now, Russia’s Federal Air Transport Agency has been trying to persuade Russia’s carriers to re-register their aircraft domestically. The agency, Rosaviatsia, is dissatisfied because it has no control over the quality of aircraft maintenance. That’s because the country of registration is responsible for monitoring airworthiness compliance.

Furthermore, Russian airlines’ lease payment revenues – estimated at about $3 billion a year – pass through foreign jurisdictions.

The idea of a ‘big shift’ from overseas registration to Russia came up in 2018 when several media outlets raised the possibility. The Russian government has been intensifying its efforts to encourage airlines to list imported aircraft on the Russian register.

Then, last year, a new bill passed in Russia, allowing imported aircraft a perpetual right to be zero-rated for VAT. Included was a clause allowing existing aircraft registered in foreign jurisdictions to remain VAT exempt on a temporary basis until 2023.

Speaking at a Moscow conference in 2019, Aleksander Yurchik, the Russian Deputy Minister of Transport, said that the decision to require the re-registration of planes in Russia had already been made, saying,

“We are very capable to maintain airworthiness in this country…I expect that at the end of the transitional period a lot of non-Russian carriers will want to register their aircraft here.” 

At the time of writing this article, the overwhelming majority of Western jets are still registered in Bermuda.

What do you think of overseas registration? Should Russia expedite its requirement for all Russian carrier aircraft to be re-registered domestically? Let us know in the comments.