Asian lessors take losses on failure to recover jets from Russia

Asian jet leasing companies have had little luck recovering planes they had provided to Russian airlines before the Ukraine war, forcing them to begin writing off the value of stranded aircraft. China's Bohai Leasing has taken a $298m asset impairment in relation to 10 planes belonging to subsidiary Avolon Holdings that are stuck in Russia, the Shenzhen-listed company disclosed late Friday. During March, Avolon managed to recover four planes. Bohai said there is a "relatively large level of uncertainty" hanging over when and how it might get back the remainder. Under the weight of the Russian write-off, the company recorded a 737.80m yuan ($111.62m) net loss for the January-March quarter. According to a ranking published by KMPG earlier this year, Avolon is the world's second-largest jet lessor by fleet size, behind only AerCap. Aircastle, controlled by Japan's Marubeni and Mizuho Leasing, similarly last week took a $251.9m write-off after recovering just two of 12 planes leased to Russian operators along with one from Ukraine. It then recorded a $215.9m net loss for the quarter ended Feb. 28 in relation to the stranded planes. The Russian portfolio had generated about $3.5m in revenue in February. "Decades of peaceful economic coexistence have enabled global aviation -- especially aircraft leasing -- to grow and thrive," Mike Inglese, chief executive of Aircastle, said during an earnings call on Thursday. "Russia's invasion of Ukraine and the international sanctions that followed make it difficult to predict what the future may hold." The lessors have been squeezed by EU sanctions which required the termination of all leases with Russian companies by March 28 as Avolon and the European units of many Asian lessors like Aircastle have long been based in Ireland for tax reasons. Russia responded to the EU's move with measures authorizing its airlines to hold onto leased planes and re-register them locally.<br/>