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Non-Tech : Airline Discussion Board
JETS 17.17-1.1%Sep 22 4:00 PM EDT

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From: TimF3/21/2022 12:46:05 PM
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‘Grand Theft Aero’: Russia’s $10bn plane grab signals losses for lessors
Lengthy battle with insurers looms after Moscow signs law allowing jets owned by leasing groups to be re-registered

Three days after the invasion of Ukraine, a Boeing 737 — operated by Russia’s Pobeda but owned by Dublin-based Avolon — was impounded after landing in Istanbul.

The plane’s seizure came as European sanctions on Russia’s aviation sector prompted a global scramble among overseas leasing groups to recover more than 500 aircraft, worth an estimated $10bn, that were stuck in the country.

But it was among the last to be repossessed, after the Kremlin moved to block such efforts last week by signing a new law allowing foreign jets to be re-registered in Russia.

“The Russian government is playing a game of what I call ‘Grand Theft Aero’,” said Paul Jebely, global head of asset finance at law firm Withers.

Russia’s actions could force the world’s largest leasing companies to write off billions of dollars worth of assets, raising the prospect of lengthy battles with insurers over who should foot the bill.

Rating agencies have warned that the lost income from the leases has increased risks to bondholders in deals backed by the aircraft.

Moscow has flouted decades-old international treaties that provided security to lessors operating in more risky jurisdictions and helped underpin a boom in international travel.

“This is the worst-case scenario, where a country unilaterally takes control of an aircraft’s register,” said Phil Seymour, president of aviation consultancy IBA. “It has never really been contemplated. There will be repercussions in terms of aircraft lease agreements.”

Some industry executives have insisted that it was too early to write off the chances of these planes flying internationally again. Others, however, believe the chances are slim.

“From a planning perspective, we should assume that those aeroplanes are gone for all intents and purposes,” one executive said.

Dublin: the world’s aircraft leasing capitalThe crisis has sent shockwaves through the aviation finance industry of Ireland, which is home to 14 of the world’s top 15 lessors, including market leader AerCap.

Irish lessors manage more than €100bn in assets, 22 per cent of global aircraft and more than 40 per cent of those that are leased, according to IDA Ireland, the country’s investment promotion agency...
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