Russia to Lose Hundreds of Aircraft from Repossession

Following sanctions put in place by the European Union (EU) last week, EU lessors will have 30 days to terminate all aeroplane-leasing contracts with Russia. Firms are now rushing to repossess their aircraft, many of which are trapped in Russia.

The package of sanctions against Russia included measures designed to hurt their aviation industry. These included a blanket ban on all exports to Russia’s aviation industry and the closure of European airspace to Russian Aircraft. Exports include sales of aircraft parts and spares to Russia but also covers services such as the leasing of aircraft to Russian Airlines. European lessors have been told they have until 28 March to terminate all contracts with Russian carriers. Given the short deadline, many firms are wondering how they will manage to repossess their aircraft. An industry source told the Financial Times:

“The 30 days is going to be really difficult for lessors to figure out how to terminate [contracts]. The bigger issue is how do you repossess that many aircraft in that time?,”


More than half of Russia’s planes on lease

Data from chAviation shows that of the 980 passenger planes in Russia, 777 are leased, and 515 are from foreign aviation firms. Not all of those firms will be from the EU, but it’s fair to say all foreign lessors will have a vested interest in removing their aircraft from Russia for financial and insurance reasons. Irish leasing firm AerCap is currently the most exposed, with 149 of its aircraft being leased to Russian Airlines. Aercap has said they will cease all leasing activities within the legally-mandated timeframe.

Aercap plane in flight
AerCap have $2.4billion worth of aircraft in Russia | © AerCap

Lessors could face financial difficulties.

With Russian banks facing expulsion from the Swift system and the rouble crashing, any foreign lessors who do not cease their contracts are likely to face financial difficulties. Many Russian carriers rely on lines of credit to pay leasing companies, so sanctions on Russian banks could cause a cascade of failed payments. Insurance is a concern, too, one that is also affecting lessors operating in Ukraine. Insurance companies can lose billions of dollars from military conflicts, which are not recouped by their premiums, so they may not want to insure planes stationed in Russia.

What are your thoughts on the EU sanctions? Let us know in the comments below!

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Josh McMinn
Josh McMinn
Jr Reporter - Josh is an Jr. Aviation Reporter at Travel Radar covering the latest industry news, developments and passenger experiences. Outside of reporting, Josh is a talented artist and camera operator with experience spanning several industries.


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