Combined fleet of Russia’s five largest airlines cleared for international flights grew by almost 100 aircraft in a week

Private carriers settle claims with foreign lessors for the first time

Russian fleet insurance settlements :: Rossiya

Russia’s five largest airlines managed to reach fleet settlements with a handful of international lessors for a total of 92 aircraft kept in the country in a response to sanctions. The list includes privately-run airlines for the first time. In addition to Aeroflot group carriers (Aeroflot, LCC Pobeda and Rossiya), S7 Airlines and Ural Airlines, the nation’s two largest private carriers, will now have a noticeable number of aircraft that will be able to perform international flights without the risk of being seized. The settlements were finalized during the period of December 14 through December 21.

All deals were approved by the US and the EU, and made through insurance claim settlement. The leasing companies dropped their claims against the Russian operators after the authorized state-owned insurance company NSK, using funds from Russia’s national wealth fund, compensated the lessors for these aircraft.

Aeroflot group confirmed the completion of the settlement process for 28 more aircraft, without disclosing the details of the agreements. But some information was released by lessors.

Dubai Aerospace Enterprise (DAE) announced that it has received cash insurance settlement proceeds totaling approximately US$118 million in respect of seven aircraft previously on lease to Aeroflot. CALC received US$23.57 million cash payment for one aircraft formerly leased to Aeroflot. GA Telesis received cash insurance settlement proceeds for two aircraft leased to Rossiya.

Russia’s largest privately-run S7 Airlines announced the settlement with AerCap, ALC and SMBC Aviation Capital for 45 medium-haul aircraft, representing almost 50% of the carrier’s fleet.

Ural Airlines, another private carrier managed to finalize the insurance settlement for 19 Airbus A320 family aircraft with AerCap.

Regarding the financial side of the agreements of these two private carriers, the following is known. ALC received US$64.9 million for the three A320s and one A321 leased to S7. AerCap received US$572 million for 29 aircraft leased to S7 and 18 to Ural.

A transfer of more aircraft to Russian ownership will let Russian airlines do more international flying.

As of November, according to Rosaviatsiya data, air connection has been established with 37 countries, and 18 Russian airlines fly to China, India, UAE, South America and Africa, among others. As many as fifty-nine foreign air carriers operate flights to Russia.

Both Russian carriers and foreign lessors have said they continue efforts to resolve disputes. But it is uncertain whether any of these discussions will result in any insurance settlement. In particular, it remains uncertain whether the necessary approvals and funding to complete any such further insurance settlements can be obtained.

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