Air Lease Claims $802.4 Million Write Off After 27 Leased Jets Stuck in Russia

The aircraft lease company said it is pursuing insurance claims to cover the losses, which it says amounts to 3.4 percent of its fleet, according to an SEC filing.

AN SEC filing says the 27 aircraft represent about 3.4 percent of the Los Angeles-based aircraft leasing company’s fleet. [File photo: Shutterstock]

Air Lease Corporation (NYSE: AL) is writing off 27 aircraft worth $802.4 million and pursuing insurance claims to cover the loss after widespread economic sanctions left the airplanes stuck in Russia.

The 27 aircraft represent about 3.4 percent of the Los Angeles-based aircraft leasing company's fleet, according to an April 19 Securities and Exchange Commission filing.

The company terminated its leases with Russian airlines after the U.S., European Union, United Kingdom, and other countries imposed economic sanctions in response to Russia's invasion of Ukraine in late February. 

"The Company has determined that it is unlikely that the Company will regain possession of the aircraft that have not been returned and that remain in Russia, which represent 21 aircraft in the Company’s owned fleet and six aircraft in the Company’s managed fleet," it said in the filing.

Air Lease's loss is far from an anomaly. According to a report by Fitch Ratings, “insurers and reinsurers could face claims as high as $10 billion in a worst-case scenario due to the grounding of planes in Russia.”

Air Lease said it did not expect that the write-off of the aircraft will result in material future cash expenditures and that it is "vigorously pursuing insurance claims to recover losses relating to these aircraft."

The write-offs don't mean the aircraft are grounded, however. Following sanctions, Russia re-registered at least 360 aircraft since early March, Aerotime reported. 

Of those illegally re-registered, 13 belonged to Air Lease Corporation, according to aviation analysis group IBA.

Air Lease's current fleet includes at least 391 owned aircraft and 93 managed aircraft, with 451 new planes on order, the company said late last month. In early April, the company announced the fleet would also be adding 32 new Boeing 737-8 and 737-9 jets, Seeking Alpha reported.

Kimberly is managing editor of FLYING Digital.

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