So far, nothing like this has happened, at least on this scale. Russia refuses to return 400 aircraft that do not belong to it at all. Their total cost is 10 billion dollars. “This is the biggest plane theft in history.”
Hopes for the return of planes are fading: Companies that have leased passenger planes to Russia, such as industry leaders Aercap or Avolon, were forced by Monday to cancel their contracts with Russian airlines as a result of Western sanctions imposed on Russia over the war in Ukraine. The measures were announced a month ago, but Russian airlines have not returned the rented cars.
Over 400 passenger aircraft worth $10 billion
“I fear we are witnessing the largest aircraft theft in the history of civil aviation,” said Vladimir Bilotkach, professor of air transport management at the Singapore Institute of Technology. Henrik Holloley, EU director general responsible for mobility and transport, agrees. According to him, the leased aircraft in Russia were “stolen”. There are over 400 passenger planes worth about $10 billion, most of which will obviously be lost.
After the imposition of Western sanctions, Russia took urgent measures to prevent the decommissioning of leased cars: they were simply re-registered in Russia to renew their safety certificates. However, under international rules, dual registration is not allowed. In this regard, Hololi says that this is a serious violation of the Chicago Convention on International Civil Aviation. More than half of the 515 leased aircraft have been registered, according to the Russian government.
Most of these aircraft operate domestic flights, although they have been recalled by the relevant authorities in Ireland and Bermuda. And without these certificates, cars are actually not allowed to fly. Using them for international flights, which are already severely restricted, will result in them being confiscated abroad. That is why the EU monitors every passenger plane leaving Russia very closely and works closely with the authorities of the countries where Russian planes land. The Russian news agency Interfax reported that 78 such planes were detained abroad last week.
Who will pay?
The question is who will pay for the damage. Although the aircraft in question are insured, experts believe that, in all likelihood, the leasing companies will have to fight for their rights for many years in court, as these are huge sums. According to the Moody’s rating agency, the damage from the war in Ukraine will cost insurance and reinsurance companies up to $11 billion. But even if these planes eventually return to their owners, their value will be unclear because they will not be maintained as prescribed and with original parts. This is due to the fact that both the maintenance and the supply of original Airbus and Boeing components are included in the list of sanctions against Russia.
For the leasing companies themselves, the losses are large, but still tolerable, since less than 10 percent of the available aircraft are leased to Russian airlines. “This will not bankrupt these companies,” said Brad Daley, director of Alton Aviation Consultancy, who previously worked for Irish leasing giant Aercap. However, the Daily Daily added that this would affect future relations with Russia, whose market potential would change radically.
Meanwhile, several private Russian airlines, worried about their future business dealings with the West, have signaled they want to return leased planes. However, for this they need permission from the Russian government.