“Stolen” aircraft: Russian airlines finalize insurance settlement procedures with lessors

Russian airlines have completed the insurance settlement process for aircraft leased to various international companies. In this process, 92 aircraft were being claimed by leasing companies.

Since the outbreak of the armed conflict between Russia and Ukraine, European and American authorities have imposed sanctions on the Russian government. These sanctions directly impact the aviation market as supply chains for spare parts, materials, and international connections have been severed.

One of the most controversial issues in this conflict is the rightful claim by leasing companies for the return of leased aircraft. Hundreds of planes are leased to these companies and have been “kidnapped” by the airlines.

Furthermore, with the supply chain of spare parts cut off, operators of internationally manufactured aircraft lack original parts and proper maintenance. There have been instances of aircraft with many systems out of service or even using alternative, non-original parts to repair the planes, as seen in photos on social media.

Ural Airlines

Ural Airlines is the most controversial case, as the company was involved in an incident with an Airbus A320. The aircraft had to make an emergency landing in a field near Kamenka, in Novosibirsk, Siberia, with 165 people on board, including passengers and crew.

It is speculated, pending the final accident report, that the plane had a hydraulic failure, preventing it from returning to the destination airport during a failed approach maneuver.

See also: Ural Airlines A320 Makes Emergency Landing in a Field in Siberia: What We Know

In relation to the insurance settlement processes for 19 aircraft leased to the AerCap group, the airline issued a brief press release. It states: “Ural Airlines has completed the insurance settlement process for 19 Airbus family aircraft with the AerCap group and legal entities managed by the AerCap group.”

“In accordance with the agreements reached, the lessors ceased their claims against the Russian parties both under insurance policies issued by Russian insurance companies and under lease agreements entered into by Ural Airlines with the AerCap group and legal entities managed by the AerCap group,” concludes the statement.

Aeroflot

The Aeroflot Group completed the liquidation process for 28 aircraft with various groups of foreign lessors, said a company representative to the media.

“The lessors ceased their claims against the Russian parties regarding these aircraft, both under insurance policies issued by Russian insurance companies and under lease agreements with Aeroflot PJSC, Pobeda Airlines LLC, and Rossiya Airlines JSC. The ownership of the aircraft was transferred to the Insurance The NSK LLC, which paid the settlement amounts,” said the Aeroflot representative.

See also: Aeroflot Technics inaugura un taller para trenes de aterrizaje de A320

Additionally, negotiations are underway for the settlement of existing claims with other lessors.

Aeroflot is negotiating with foreign lessors for the insurance settlement of 61 aircraft under operating lease, as previously reported by the company’s CEO, Sergei Aleksandrovsky.

Ultimately, these aircraft will become the property of a leasing company specially created in the Russian Federation. This acquisition will be financed through the National Social Welfare Fund, and Aeroflot will make lease payments on its behalf. Net profits from the airlines will also be used for the transactions.

S7 Airlines

S7 Airlines reached an agreement to resolve relations with a group of foreign lessors involving the insurance company OOO IC NSC for 45 aircraft. These aircraft represent almost 50% of the airline’s fleet, and the claim also includes four engines owned by leasing companies.

As per the agreements reached, lessors, including AerCap, ALC, and SMBC Aviation Capital, ceased their claims against the Russian parties under both insurance policies and lease contracts of the mentioned aircraft.

See also: Russia authorises S7 Airlines to return two Boeing 737 MAX 8 to foreign lessors

S7 Airlines continues negotiations for the settlement of relations with other foreign lessors of the company. In these negotiations, as in the just-completed transaction, the airline is receiving extensive legal support from the law firm Better Chance.

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