Aviation lessors have secured settlements with Russia totaling more than $2.5 billion for over a quarter of the roughly 400 aircraft stuck in the country since Moscow's invasion of Ukraine in 2022. This development comes after months of negotiations and legal battles between international lessors and insurers. The settlement involves the transfer of ownership of the aircraft to the Russian state insurance company, NSK, which will then transfer the planes to Russian airlines. NLK-Finance, a subsidiary of NSK, has been allocated 296.8 billion roubles ($3.31 billion) to date to buy out the aircraft that have been the subject of a standoff between international lessors and insurers.
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The impact of these settlements on lawsuits launched by lessors against Western insurers remains unclear. However, this agreement marks a significant step in resolving the dispute over the stranded planes, which has led to a series of lawsuits seeking damages of around $8 billion. Several aircraft leasing firms have announced settlements with Russian insurance companies. Ireland-based AerCap, the world's largest aircraft lessor, received $645 million from NSK in a settlement over 17 jets and five spare engines leased to state-controlled airline Aeroflot and its subsidiary Rossiya. AerCap has terminated its claims against NSK, Aeroflot, Rossiya, and their international reinsurers with respect to these aircraft and engines. Aircastle filed a claim in New York against more than 30 insurers in October 2022 over nine aircraft and other equipment stranded in Russia. Air Lease received about $64.9 million in cash as part of an insurance claim settlement for four Airbus jets it had leased to S7 Airlines. BOC Aviation received $208 million under an insurance settlement for eight aircraft stuck in Russia.
Irish-based lessor CDB Aviation, owned by the China Development Bank, settled for 1.417 billion yuan ($197.50 million) over four planes in October and for 145 million yuan for one plane in December. Irish-headquartered SMBC, owned by a consortium including Japan's Sumitomo Corp and Sumitomo Mitsui Financial Group, received a settlement of $710 million for 16 aircraft and their engines previously leased to Aeroflot.
The settlement agreements and the transfer of ownership of the aircraft to Russian airlines represent a compromise in the economic war between Moscow and the West. While the agreement may lower the bill facing insurers, it remains to be seen how this will affect the ongoing lawsuits and the future of aircraft leasing in Russia.