Russian airlines should register planes as their property, even though they don’t actually own them: Russian President Vladimir Putin signed a law on Monday that would make hundreds of planes inaccessible to their foreign owners. It’s about machines worth more than ten billion dollars. According to the law, airlines should register the aircraft they lease in Russia and issue new airworthiness certificates so that they can continue to be used there.
The sanctions introduced by the European Union because of the war against Ukraine stipulate, among other things, that leasing contracts will be terminated by March 28 and that more than 600 machines will be handed over to their owners, most of whom are based in Ireland. Aircraft manufacturers are also not allowed to deliver new aircraft or spare parts to Russia. A large part of the fleet of Russian airlines is leased and registered in Bermuda. The aviation authority in Bermuda decided at the weekend not to renew the airworthiness certificates of the leased fleet because spare parts would be missing in the future.
Hardly anyone in industry circles expects the planes to be returned to their owners. “There will be no confiscations,” said the head of a leasing company that has leased dozens of planes to Russian airlines. The industry now expects that it will have to write off at least part of the fleet used in Russia. Because even if the leasing companies eventually got access to the machines again, the aircraft would probably be in an unsaleable condition. The Russian airlines will probably have to start cannibalizing part of the fleet for spare parts storage in the next few weeks so that the rest can continue flying. This is accompanied by a huge loss in value.
Observers expect that the legal disputes could drag on for years. The planes are insured against war damage and confiscation through the airlines and often also through the leasing companies. However, it is still completely unclear whether insurers will readily accept such a large claim.