The president of Russia Vladimir Putin signed a decree allowing Russian airlines to fulfill their financial obligations to foreign-registered companies in rubles.
According to the decree ‘On the temporary procedure for fulfilling financial obligations in the field of transport to certain foreign creditors’, which was signed by the president on April 1, 2022, Russian airlines will be able to pay for aircraft leasing and purchase from foreign-based entities in rubles.
The document also states that financial obligations, including payments for aircraft leases, will be considered as fulfilled when the carrier transfers the number of rubles that is equivalent to the value of a foreign currency.
Payments in rubles will be calculated at the official currency exchange rate of Russian Central Bank on the day the transfer is made. Meanwhile, leasing companies must have an account in a Russian bank to receive such payments, the document explains. This requirement might make the operation difficult, with Russian banks also being affected by international sanctions.
President of the country also obliged the Russian government to establish new procedures for the execution of aircraft leasing contracts. As it is stated in the decree, airlines aiming to make payments for lease will need to first receive permission from the Government Commission for the Control of Foreign Investments.
So far, foreign lessors have requested the return of more than 500 aircraft leased by various Russian airlines, a fleet with an estimated worth of $10 billion.
As international sanctions were imposed on Russia in the wake of its invasion of Ukraine, AerCap became one of the worst affected companies, forced to suspend multiple leasing contracts with the country. The major Irish aircraft leasing company alone has more than 100 aircraft that remain trapped in Russia. In an official statement dated March 30, 2022, AerCap’s chief financial officer (CFO) Peter Juhas confirmed that the company submitted an insurance claim for approximately $3.5 billion. AerCap has leased a total of 135 planes and 14 engines to Russian carriers, but only 22 aircraft and three engines have been returned.