Western-owned aircraft in Russia may face seizure, nationalization
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Commercial aircraft leased by Russian airlines from Western owners may be vulnerable to seizure and nationalization, reports indicated Thursday.
A total of 589 Western-built aircraft, with a combined market value of $13 billion, are on the ground at Russian airports, according to an analysis released Thursday by Russell Group, a data and analytics company.
The impact of Russia’s invasion of Ukraine represents the biggest potential loss to the aviation war market since 9/11 in the form of hundreds of leased planes on the ground in Russia that are owned by European companies, Russell said.
The analysis was based on data taken from the firm’s ALPS Aviation database, which tracks the number of aircraft at airports across the globe.
“Clients are all trying to understand the number and value of planes on the ground in Russia, as there are concerns that these aircraft could be confiscated by the Russian government,” Suki Basi, Russell Group managing director, said in a statement.
Meanwhile, BOC Aviation, an aircraft leasing company, said in its earnings release issued Thursday that as of Feb. 28, 18 of its owned aircraft — with a total net book value of $935 million — were leased to airlines in Russia and may be affected by Western sanctions.
BOC also said that international aviation insurance markets are progressively canceling certain elements of insurance policies in relation to aircraft located in Russia or leased to Russian airlines — a “complex and rapidly developing situation” that the company says it is monitoring closely.
Also Thursday, news agency Reuters reported that Russia has published a draft law that could prevent its airlines from returning over $10 billion of leased aircraft.
The specter of Russian asset seizures has been raised by sources in political risk coverage circles as those markets react to the conflict.
