BOC Aviation says lessors seeing 'horrendous' hikes in insurance costs

The likely huge insurance claims related to the cancellation of aircraft leases in Russia is already leading to "horrendous" hikes in the cost of renewing policies, the CE of major lessor BOC Aviation said on Thursday. Over 400 leased planes worth almost $10 billion remained in Russia after a March 28 deadline to cancel the contracts in line with Western sanctions over the war in Ukraine, leaving lessors facing heavy potential writedowns or a long insurance battle. In a trading update on Thursday, BOC said the net book value of the 17 owned aircraft it was in the process of recovering from Russia - net of all cash collateral held in respect of the aircraft - was $589 million or 2.5% of its total assets. All letters of credit held in respect of the aircraft had been successfully drawn, it added. "Because there are going to be huge claims on these insurances this year for confiscation or theft if the aircraft aren't given back, this will then have a knock on effect on insurance costs," Robert Martin told an aviation conference. "This is one of the unforeseen circumstances that is going to hit us later this year and I'm hearing some horrendous numbers for some of the near term renewals due at the end of March. We fortunately don't go until January next year." The world's top aircraft lessor AerCap said last week that it had submitted a $3.5b insurance claim for more than 100 jets stuck in Russia, the largest exposure in the sector.<br/>