Western sanctions have stranded hundreds of airliners worth an estimated $12 billion

European aircraft leasing companies are ending their contracts with Russian airlines because of Western sanctions.

The European Union gave aircraft lessors until March 28 to end rental contracts in Russia. The EU banned any plane owned or controlled by a Russian legal or natural person from entering EU airspace as part of the sanctions against Putin.

Russia has 980 commercial aircraft in service, with one leased. A majority of those are rented from Ireland-based companies.

According to IBA, AerCap has the largest fleet in Russia with 152 planes. The company said it would be pulling all of its contracts with Russian airlines, with the jets estimated to be worth $2.5 billion.

Aeroflot, S7 Airlines, Rossiya, Azur Air, and Ural Airlines are some of the Russian clients of AerCap. Nine Irish aircraft leasing companies have planes in Russia.

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According to Ishka, there is $12 billion worth of leased jets that will be returned to their owners. If airlines and government authorities don't cooperate, the lessors could face logistical difficulties getting the planes out of Russia.

IBA aviation specialist Phil Seymour told The New York Times that there were hundreds of planes that needed to be flown out. Where can they go? Will they play ball? Will there be an order from above telling not to cooperate?

The Cape Town Convention makes it easier for lessors to repossess leased aircraft if an entity can't pay the cost. Airlines get cheaper financing in return. It is still unclear how Russia will respond to the deal, and court cooperation is needed to enforce it.

Airspace bans in Russia and Europe could make it difficult for lessors to get to Russia to repossess the planes, CNBC reported.

AerCap acknowledged the risk of doing business with Russia and said it could face problems getting the aircraft back.

The company said in a security filing that they may encounter obstacles and are likely to incur significant costs.

The New York Times reported that Ishka consultant Paul O'Driscoll said that companies are at risk of financial losses due to canceled contracts. When a lease ends, companies must return the planes to the lessor in good condition, meaning a clean interior and no maintenance issues.

Russian airlines have no obligation to maintain the plane when a contract is terminated.

You have to leave the metal there.

AerCap had $75 billion worth of assets at the end of the year. According to The New York Times, the sanctions could cripple companies with smaller fleets.

In addition to AerCap, companies like Singapore-based AOC Aviation and Ireland-based Avalon also have planes in Russia that are impacted by the sanctions.

BOC has 18 planes in the country, while Avalon has less than 20 in Russia, according to the CEO.

The new EU sanctions are complex and we are unable to provide further information.