Biggest jet leasing company lodges $3.5bn claim for aircraft stuck in Russia

AerCap, the world’s biggest aircraft leasing company, said it had lodged an insurance claim of $3.5b to cover the potential loss of its planes and engines that remain stuck in Russia, setting the stage for a protracted battle between the industry and insurers. The Dublin-based company had the largest exposure of any foreign lessor to Russia when western sanctions were introduced after its invasion of Ukraine. It said on Wednesday it had about $2.5b at risk and warned it expected to at least partially write down the value of its assets in the first quarter. The company has retrieved 22 of the 135 planes and three of 14 engines that had been placed with Russian carriers before the start of the war. The removals, along with cash from letters of credit with Russian customers, reduced its exposure from $3.1bn at the end of December, it said. Peter Juhas, CFO, said he expected lessors’ insurance claims over Russia to be “contested given the large sums [at stake] across the industry”. AerCap, however, intended to “vigorously pursue” all of its claims under its insurance policies, as well as “other legal remedies that may be available to us”, according to chief executive Aengus Kelly. Sanctions imposed on Russia triggered a global rush among overseas leasing groups to recover more than 500 aircraft, worth an estimated $10bn, that were stuck in the country. International lessors had until Monday to sever their ties with Russian carriers. Experts, however, had warned that the prospects of recovering the jets were slim after the Kremlin earlier this month moved to allow foreign planes to be re-registered in Russia. It means aviation insurers face record losses if the planes are not recovered through policies that cover owners for confiscation, experts have warned. But given the likely legal wrangle and loss limits written into policies, estimates range widely.<br/>