Aircraft leasing firm BOC retrieves 747 from Russian operator
Aircraft lessor BOC Aviation announced today it had retrieved a Boeing 747 freighter from Russian operator AirBridgeCargo.
The aircraft was flown on 25 March from Hong Kong to California after a US judge allowed the company to repossess it.
The Singapore-based lessor explained that the plane was worth $148m and AirBridgeCargo had breached leases for two other planes when it flew them from mainland China to Russia.
The freighter remain in Russia and are part of BOC’s 18 planes leased to Russian operators for a book value of $935m.
BOC is one of the many companies who are facing repossession issues following the Kremlin’s decision to re-register the foreign-leased aircraft in the country as part of its anti-sanctions campaign.
President Putin’s move, which could create a £10bn “nightmare scenario” for both lessors and insurers, had a manageable impact on the world’s largest lessor AerCap.
The Dublin-based company said today it was calculating the cost of its 113 aircraft and 11 engines currently impaired in Russia.
“We expect to recognise an impairment on our assets in Russia that have not been returned to us as early as the first quarter of 2022, although we have not determined the amount of any impairment,” the company told investors this morning.
In the fourth quarter of 2021, AerCap’s net income was $89m while the income for the whole year excluding expenses amounted to $1bn.
“Notwithstanding the Ukraine invasion and the broad sanctions imposed against Russia, where we had approximately 55 per cent of our fleet, we believe the continued recovery in air travel in many parts of the world puts AerCap on a positive trajectory heading into 2022,” said AerCap’s boss Aengus Kelly.
According to analysts, the biggest long-term consequence of the Kremlin’s retaliation against the West would be prompting the aircraft leasing market to stay away from Russia well after the end of the war.
Domhnall Slattery, chief executive of BOC’s rival Avolon, said yesterday the sector would “think long and hard about the risks of that jurisdiction” while aviation analyst Alex Macheras said it would be difficult to see “an aviation firm willing to engage in future aircraft leasing contracts with Russia going forward.”