Russian jet repos stoppage puts lessors in a legal bind

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As global leasing firms look to an imminent sanctions period to reclaim more than 400 jets worth nearly $10 billion from Russian airlines, experts warn of a legal battle that could last a decade. are subject to radio silence. Western bans imposed after Russia’s invasion of Ukraine allow most leasing companies to cut ties with Russian airlines until his March 28th, as lenders desperately try to seize planes. On the other hand, there is a cat-and-mouse game from Asia to Africa.

This includes Istanbul, according to trade publication ch-aviation and two jets confiscated in Mexico City. Others roam the repo web. Last week, an Aeroflot Boeing 777 narrowly escaped a seizure in Southeast Asia and the Gulf led by a non-Russian bank, two people familiar with the matter said. An Airbus A321neo leased to the same airline was the target of a failed take-back in Egypt, aviation magazine The Air Current reported. Aeroflot did not respond to a request for comment. Risk of Mass Destruction A total of about 780 jets are leased to Russian airlines, 515 of which are from abroad.

The leasing company has terminated the lease and is requesting the return of the aircraft along with the necessary documentation to place the aircraft on the new airline. But so far Western observers say otherwise. “Officially nothing, but Russian airlines have not returned the planes. The only ones that are already outside Russia are a handful that could be taken back,” said Bertrand Grabowski, an independent aviation consultant.

Even objects leased within Russia may be charged by foreign banks. About 425 of them are most at risk, according to advisers to Ascend by Cyrium. For a mature industry with a portfolio worth up to $300 billion, more than 15,000 jets have been grounded due to the pandemic. is still a long way from the global impact of But the loss of a market that accounts for 5-6% of global passenger traffic has shocked a sector that owns more than half of the world’s aircraft. The resulting flood of damages and possible depreciation charges can lead to protracted liability disputes.

When Russia launched a “special operation” in Ukraine last month, some financiers reported the first signs of panic. We offered to sell the ship, and two international landlords asked if we wanted to buy the entire Russian portfolio,” he said, adding that the offer was turned down.

“This will go to court forever. All in all, it’s a very bleak situation,” said Jerrold Lundquist, he’s managing director of the Lundquist Group. “Maybe he’s looking at a decade-long litigation between airlines, lenders and insurers,” he added Grabowski. Ratings agency Moody’s warned last week that the continued escalation of sanctions could put pressure on a leasing industry that has grown from volatile roots in the 1970s to a dominant force.

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