Volga-Dnepr facing nationalization

The Putin regime might soon be in command of three additional AN-124 freighters belonging to Volga-Dnepr’s fleet. They would add to the fleet of – supposedly – ten AN-124 operated by the Russian Air Force. Alexey Isaikin, founder and former owner of the Volga-Dnepr Group, made the announcement of the forthcoming asset transfer to the state during the celebration of the Russian freight carrier’s 35^th anniversary at its homebase, Ulyanovsk.

There are many victims of Russia’s invasion of Ukraine. Above all, the human victims: Ukrainians, Russians, North Koreans, Colombians, and others. But those affected also include private companies whose business models have been undermined by the military attack which violates international law, provoking subsequent Western sanctions. The cargo conglomerate, Volga-Dnepr, will soon become a prominent name on the list of those who have fallen by the wayside. The official date for this to happen is 31DEC25, but sooner decisions are conceivable.

Network cuts, loss of markets
According to market analysts – there are no official figures – Volga-Dnepr is permanently incurring losses. With the adoption of sanctions against Russia and the supporters of the invasion of Ukraine, Volga-Dnepr lost its most important markets and the network of its once very profitable linehaul arm, AirBridge Cargo, became obsolete. This was based on cargo transport between China and the EU, with stopovers in Moscow or Novosibirsk, but Volga-Dnepr’s AN-124 and ABC’s B747 and B777 freighters also served the U.S. and Canada, although to a lesser degree.

The German airport, Leipzig (LEJ), was the preferred base outside its Russian home turf, where the company offered multiple MRO services. Under the name Strategic Air Lift International Solution (SALIS), up to four AN-124s were stationed there. The large freighters, partially provided by Ukraine’s SALIS partner, Antonov Airlines, were deployed on behalf of NATO and most EU members in cases of urgent humanitarian need or to supply military goods in support of ground forces operating in Afghanistan or parts of Africa. However, the Russian capacity provider withdrew from this lucrative joint venture in 2018, presumably under pressure from Moscow.

Steady decline
In recent months, Volga-Dnepr aircraft, including five Il-76 freighters, have been operating within Russia or on routes to China, the United Arab Emirates, and India: all countries that have not joined the Western sanctions regime. This crippled network was not sufficient to generate profits, especially since the AN-124 “Ruslan” aircraft are more than 30, in some cases 40 years old, which makes them very prone to repairs. Added to this is Chinese competition, which manages to secure ever larger shares of the Russian air freight market. According to Rosaviatsiya, the Russian aviation authority, cargo traffic fell by almost 7% in the first half of the year (year-on-year) to 202,000 tons. More than half of the market (52.5%) was taken by the state-owned Aeroflot group.

Submission instead of protest
Confronted with the fast-approaching end of his conglomerate and instead of blaming Moscow’s martial policy for the downfall of his company, Volga-Dnepr founder Alexey Isaikin, sends signs of loyalty to the Kremlin. During the celebration of Volga-Dnepr’s 35th anniversary, including its linehaul subsidiary, AirBridge Cargo, Isaikin said that the group “is of interest to those who need its services, [ but] this interest is manifested in light of the specifics of the current moment. There is something to take back to the motherland,” Isaikin is quoted by the Russian daily, Kommersant. Addressing the audience, he exclaimed that Volga-Dnepr has represented Russian civil aviation with dignity on the international market, where “they still mourn the company’s absence. The demand for Volga-Dnepr’s capabilities for the state has been confirmed by its partnership with the Moscow government. If the motherland says that the company must serve the motherland, then so be it: nationalization, confiscation, a fair deal, any form […].”

Isaikin is smart enough to know that a submissive attitude toward those in power in the Kremlin is equivalent to life insurance. Other fates have taught him that.