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Hundreds Of Leases For Russian Planes Will Be Terminated As A Result Of EU Sanctions.


28/02/2022


Hundreds Of Leases For Russian Planes Will Be Terminated As A Result Of EU Sanctions.
Hundreds of aircraft leases with Russian airlines are due to be terminated as a result of Western sanctions on the country over its invasion of Ukraine. A part of the sanctions warrant that the contracts for leases be revoked.
 
The world's largest leasing business, AerCap Holdings, said on Monday that it will stop leasing to Russian airlines, while BOC Aviation indicated that most of its leases in Russia would have to be terminated by March 28.
 
Russia has warned the West that sanctions against its aviation industry will result in retaliation.
 
According to Cirium, Russian firms have 980 passenger planes in service, with 777 of them leased. Two-thirds of them, or 515 aircraft, are hired from foreign companies in the predominantly Irish sector, with an estimated market worth of almost $10 billion.
 
According to consultant IBA, AerCap, which has the most exposure to Russia and Ukraine with 152 planes, 5 percent of its fleet was leased in Russia as of December 31.
 
Aeroflot, S7 Airlines, Rossiya, Azur Air, and Ural Airlines are among its Russian clients, according to the website of AerCap, with planes worth an estimated $2.5 billion, according to aviation services provider ACC Aviation.
 
Repossession of aircraft might be difficult, according to ACC Aviation Vice President Viktor Berta, especially if Russian aviation authorities and airlines do not cooperate with lessors.
 
Because of the airspace restrictions, it may take weeks for staff to fly to Russia to reclaim the plane, he added.
 
According to CEO Domhnal Slattery, Avolon, the world's second largest leasing firm, the company has less than 20 jets in Russia and one or two in Ukraine out of a total fleet of more than 550 planes. find out more
 
Avolon was afraid that sanctions on international money transfers through SWIFT may be broken, making it difficult for airlines to pay their bills, he stated at the time.
 
When questioned about the sanctions, Avolon remained silent.
 
On Sunday, the leaders of the Group of Seven (G7) said that Western partners had chosen to shut off "some Russian banks" from the SWIFT system, which ensures speedy cross-border transfers and has become the primary method of financing international commerce.
 
BOC said it has 18 planes in Russia, accounting for 4.5 percent of its total fleet, with Aeroflot subsidiary Pobeda, Ural Airlines, S7 Airlines, and AirBridgeCargo Airlines. It also has a plane on lease to Rossiya Airlines in its managed fleet.
 
"Our policy is to fully comply with all laws applicable to our business," the lessor said in a statement. "The practical consequences of the new EU sanctions are complex and at the present time we are unable to provide further information."
 
According to its website, Dubai Aerospace Enterprise (DAE) has at least three Russian airline clients, including Aeroflot. A request for response from the Dubai-based lessor was not returned.
 
According to Reuters, Novus Aviation Capital Co-Chief Executive Mounir Kuzbari said the company has no aircraft in Russia but that a large number of lease cancellations in Russia might affect worldwide lease prices and aircraft values.
 
SMBC Aviation Capital, Air Lease Corp, and Aviation Capital Group are among the non-Russian lessors having planes in the nations, according to IBA.
 
SMBC stated that it will abide by any applicable consequences.
 
(Source:www.rte.ie)