Factbox: Aviation lessor settlements with Russia over trapped planes

NSK

31/01/2024 13:52

LONDON, Jan 31 (Reuters) - Aircraft leasing firms have
secured settlements with Russia totalling more than $2.5 billion
for over a quarter of the roughly 400 aircraft stuck in the
country since Moscow's invasion of Ukraine in 2022.
    In return, international lessors are handing ownership of
the planes to state insurance company NSK, which will transfer
them to Russian airlines.
    NLK-Finance, a subsidiary of NSK, has been allocated 296.8
billion roubles ($3.31 billion) to date to buy out aircraft that
have been the subject of a stand-off between international
lessors and insurers, Russia's finance ministry said this month.
    The impact of these settlements on lawsuits launched by
lessors against Western insurers was unclear, the heads of
aircraft lessors DAE Capital and Aircastle Advisor told the
Airline Economics conference in Dublin this week.
    Lessors have been suing dozens of insurers over losses of at
least $8 billion over the trapped planes, with vast court trials
scheduled in Dublin in June and London in October. Some are also
being heard in U.S. states. 
    In separate litigation, groups of lessors are trying to
prevent reinsurance cases worth more than $4 billion from being
heard in Moscow, a court filing shows.
    Below are details of settlements reached to date between
lessors and Russia.
    
    AERCAP
    Ireland-based AerCap  AER.N , the world's largest lessor,   
 said last September it had received $645 million from NSK in a
settlement over 17 jets and five spare engines leased to
state-controlled airline Aeroflot  AFLT.MM  and its subsidiary
Rossiya.
    In December, the lessor reached a second settlement worth
$572 million over 47 aircraft and five spare engines leased to
JSC Ural Airlines and JSC Siberia Airlines (S7). 
    AerCap has sued insurers such as AIG  AIG.N  and Lloyd's of
London  SOLYD.UL  for $3.5 billion over the loss of 116 aircraft
and 23 aircraft engines in London's High Court under its
all-risks policy. 
    
    AIRCASTLE ADVISOR 
    Aircastle said earlier this month it had received $43
million in a settlement relating to four aircraft formerly on
lease to two Russian airlines. 
    Aircastle filed a claim in New York against more than 30
insurers in October 2022 over nine aircraft and other equipment
stranded in Russia. 
    Aircastle said in 2022 it had booked $252 million in
impairment losses for the jets.

    AIR LEASE
    Air Lease  AL.N  said in December it had received about
$64.9 million in cash as part of an insurance claim settlement
for four Airbus jets it had leased to S7 Airlines. The
settlement does not include five other aircraft previously
leased to S7.
    
    BOC AVIATION
    BOC Aviation  2588.HK  said in November it had received $208
million under an insurance settlement for eight aircraft stuck
in Russia. Singapore-based BOC recognised an $804 million asset
write-down in August 2022 relating to 17 aircraft in Russia. BOC
is suing insurers through courts in Dublin.
    
    CDB AVIATION
    Irish-based lessor CDB Aviation, owned by the China
Development Bank, said in October it had settled for 1.417
billion yuan ($197.50 million) over four planes and in December
said it had settled for 145 million yuan for one plane.
    CDB Aviation recognised a 747 million yuan asset write-down
in August 2022 but said this was not the full value of the jets.
CDB is pursuing a claim against insurers in Dublin.
    
    DUBAI AEROSPACE
    Dubai Aerospace Enterprise said in December it had received
a cash settlement totalling around $118 million for seven
aircraft previously leased to Aeroflot. 
    It wrote off almost $600 million for 19 aircraft stuck in
Russia in 2022. DAE and its subsidiary Falcon are suing 11
insurers for $900 million in London over 21 aircraft and
equipment.
    
    GA TELESIS
    GA Telesis said in December it received an insurance
settlement for two planes previously leased to Rossiya. It did
not provide financial details.
    
    SMBC AVIATION CAPITAL
    Irish-headquartered SMBC, owned by a consortium including
Japan's Sumitomo Corp  8053.T  and Sumitomo Mitsui Financial
Group  8316.T , said in October it had received a settlement of
$710 million for 16 aircraft and their engines previously leased
to Aeroflot.
    SMBC recorded an impairment of $1.6 billion in 2022 to cover
the full financial impact of having 34 jets stuck in Russia. It
is suing insurers in Dublin.
($1 = 89.5650 roubles)
($1 = 7.1746 Chinese yuan renminbi)

 (Compiled by Carolyn Cohn, Kirstin Ridley and Gleb Stolyarov
Editing by Mark Potter)
 ((carolyn.cohn@thomsonreuters.com; 44 207 513 4391;))