russia's state-owned defense and industrial conglomerate Rostec is preparing another major restructuring of its aviation assets as the country's civil aviation sector continues to struggle under the weight of Western sanctions, according to Ukraine's Foreign Intelligence Service (SZRU).
According to the agency, Rostec plans to consolidate several aviation businesses into a single holding company managed by Ilyushin Finance Co. The restructuring would bring together passenger carrier Red Wings, cargo airline Sky Gates, medical aviation assets, and leasing company Aviacapital-Service under one corporate structure.
Read more: russia's Strategic Aviation Crisis: Failing Attempts to "Reproduce" the Tu-160 and Tu-22M3 at the Kazan Aviation Plant
Officially, the move is being presented as an effort to centralize management and establish a unified aircraft maintenance system. However, the SZRU assesses that the primary objective is to obscure the deteriorating financial condition of individual companies by merging their financial reporting into a single holding.
The intelligence service points to Red Wings as one of the clearest examples of the sector's problems. According to the SZRU, the airline can no longer sustain its charter operations. Of its three Boeing 777 aircraft, only one remains in scheduled service, while another has been placed in reserve and the third is effectively out of operation.
The situation has reportedly been exacerbated by years of internal management disputes that have delayed key personnel decisions and contributed to the departure of experienced aviation specialists.
The cargo carrier Sky Gates is said to be facing similar difficulties. russia's cargo aviation sector continues to contract amid shortages of engines and spare parts, extended maintenance cycles, and an aging fleet that suffers from both limited repair capacity and a shortage of qualified technicians.
According to the SZRU, creating a single holding company will not resolve these underlying problems. Instead, it will merely redistribute already scarce resources, including funding, personnel, and spare parts, among struggling operators. In practice, this means lower-priority carriers may be forced to sacrifice operations to keep more strategically important airlines functioning.
The intelligence service concludes that no corporate restructuring can restore access to Western aircraft components, accelerate domestic aircraft production, or reverse the continuing loss of skilled personnel after years of crisis management.
In the SZRU's assessment, russia's aviation industry faces systemic challenges driven by sanctions, technological isolation, fleet degradation, and a lack of industrial capacity. Merging companies into a larger holding may improve financial reporting on paper, but it does not address the fundamental causes of the sector's decline.
Read more: Strategic Aviation Manufacturer in russia Meets Only 10% of Tu-214 Production Plan
