Hundreds Of Leased Russian Planes To Be Seized

The aviation industry was impacted by the European Union's sanctions against Russia. The European Union will be closing its airspace to Russia. A bunch of Russian jets are supposed to be seized.

Planes in Russia leased from EU companies to be returned

The European Union requires aircraft leasing companies to end their contracts with Russian airlines within 30 days. A significant portion of airline fleets aren't actually owned by airlines, but rather planes are leased on a long term basis from aircraft leasing companies.

There are believed to be over 1,000 commercial passenger planes in Russia, and over 800 of them are leased. There are different types of leasing firms, and they are not all based in the European Union. Some of the biggest ones are.

AerCap is the world's largest aircraft leasing firm, and it is based in Ireland, which has tax advantages. Russian airlines lease around 150 planes from the company.

Russian carriers have the ability to make lease payments for planes they still have, even beyond the concept of leases being terminated. With restrictions being put on banking in Russia, airlines there may no longer be able to make their huge leasing payments, which are hundreds of millions of dollars per month. That isn't even taking into account the collapse of Russia's currency.

Actually seizing these planes is a different story

The process of trying to seize aircraft being operated by Russian airlines will probably not be as easy as it sounds.

• I can’t imagine aircraft leasing companies will have much luck sending people to Russia to repossess these planes
• Often it would be easier to repossess these planes at a foreign destination, but with Russian airlines being banned from many countries, there are limited opportunities for that
• The countries that Aeroflot continues to be able to fly to are generally going to be more pro-Russia, and I’m not sure it would be all that easy there either

There are unconfirmed rumors that a couple of Russian planes have been seized. Insurance has been canceled for jets because of the latest sanctions. For example:

• A Nordwind Airlines Boeing 777-300ER with the registration code VP-BJP flew from Khabarovsk to Mexico City on February 26, and didn’t depart as planned
• A Pobeda Boeing 737-800 with the registration code VQ-BTC flew from Mineralnye Vody to Istanbul on February 27, and didn’t depart as planned

It will be interesting to watch these planes and other Russian aircraft over the next few days.

Bottom line

Many planes will be seized because European Union aircraft leasing companies have stopped doing business with Russian airlines. The process of actually seizing these planes might be a different one, given that Russian carriers are prevented from operating to many points around the globe right now.

Russia has been investing a lot in its own aircraft development program for the past several years, so one has to wonder if that will become more of a focus, so that the country doesn't have to rely on foreign aircraft. There is a question of whether Russia will have the money to invest in such a program.

Do you think the leasing companies will be able to seize the planes?