Dividends and US Commerce Dept cracks down on Russian airlines after export control violation

When Russian invaded Ukraine one of the responses of the west was to impose sanctions which is a good thing. Sanctions are a double sided sword because the companies are encouraged to diversify their operations and be global companies.

In an article by David Shepardson and Karen Freifeld of Reuters wrote about Boeing and Russian air fleets. The world of airlines is a monopoly betweein Airbus and Boeing. The 3 big Russian airlines are Aeroflot, Azur Air and UTair with over 170 Boeing planes. The big cargo airliners are Volda-Dnepr Group, AirBridge Cargo and Atran.

The US Department of Commerce is ensuring that parts and maintenance to the Russian operated Boeing planes do not happen. If that does not happen, the planes are unsafe to fly and are grounded. The Secretary of the US Commerce is Don Graves and he believes the export controls are working. New export licensing requirements have decreased 99%.

Linking to dividend paying stocks, in relative normal times, Boeing is one of the US largest contributors to the exports from the US and generally that is a good thing for airlines around the world as goods, services and people move freely. At special times, the government imposes sanctions and exports fall. Does the government help its domestic companies or do they take the hit and hope the government helps them in other ways. Often times the government works with and for companies, sometimes the risk is high but that is how the industry works. If you invest in a company such as Boeing you should understand some of the risks.

There are more questions than answers, till the next time – to raising questions.

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