Photo: Instagram/Aercap
A few weeks ago, in response to the European and U.S. sanctions saying that aircraft lessors had to pull all their planes from Russia, a new national law enabled the country to continue to use these aircraft for domestic flights and basically refuse to hand them over. We’re talking about approximately 500 passenger aircraft that are operating with the country’s main carriers, and more than 100 of these belong to Aercap.
Aercap is considered the world’s biggest aircraft lessor, so its problems are just as big. Following the imposed sanctions, the Dublin-based company terminated leases on 135 planes and 14 engines with Russian airlines, Irish Times reports.
Not only did it lose the $33 million per month that it was making in rent, on the aircraft it was leasing to Russia but it also found itself unable to recover its aircraft from the country so that it could lease them to other carriers. According to Aercap, the planes that are stuck in Russia represent 5% of the value of its entire fleet, leading to a potential net loss of $2.5 billion.
As a result, the leasing company filed insurance claims adding up to $3.5 billion. Even though insurers will probably contest these claims, “we intend to aggressively pursue all our claims on all our policies,” Aengus Kelly, Aercap's chief executive, told Irish Times.
This shows one of the many ramifications with complicated legal aspects of the sanctions imposed on Russia. It could be argued that the Russian airlines that have held on to the 500 foreign aircraft are operating them illegally, disregarding international laws. But with no access to parts and maintenance services, in addition to all the other financial factors, it’s hard to believe that they are able to actually use them, even internally. Throwing insurance claims in the mix just adds another level of complexity to the issue.
Still, Aercap’s executive acknowledged the fact that potential financial losses are “far less important" than the loss of human lives in Ukraine, which is why peace is the only urgent goal.
Not only did it lose the $33 million per month that it was making in rent, on the aircraft it was leasing to Russia but it also found itself unable to recover its aircraft from the country so that it could lease them to other carriers. According to Aercap, the planes that are stuck in Russia represent 5% of the value of its entire fleet, leading to a potential net loss of $2.5 billion.
As a result, the leasing company filed insurance claims adding up to $3.5 billion. Even though insurers will probably contest these claims, “we intend to aggressively pursue all our claims on all our policies,” Aengus Kelly, Aercap's chief executive, told Irish Times.
This shows one of the many ramifications with complicated legal aspects of the sanctions imposed on Russia. It could be argued that the Russian airlines that have held on to the 500 foreign aircraft are operating them illegally, disregarding international laws. But with no access to parts and maintenance services, in addition to all the other financial factors, it’s hard to believe that they are able to actually use them, even internally. Throwing insurance claims in the mix just adds another level of complexity to the issue.
Still, Aercap’s executive acknowledged the fact that potential financial losses are “far less important" than the loss of human lives in Ukraine, which is why peace is the only urgent goal.
Google News