Aircraft leasing company AerCap said it received a cash settlement of $645 million for 17 aircraft and five engines leased to Aeroflot, including its subsidiary Rossiya Airlines.
In a United States (US) Securities and Exchange Commission (SEC) filing on September 5, 2023, AerCap said it “received cash insurance settlement proceeds in the total amount of approximately US$645 million in full settlement of our insurance claims under the Aeroflot group’s insurance policies in respect of the 17 aircraft and five spare engines” that were leased to the Russian airline.
Once it receives the funds from the “Insurance Company NSK”, a Russia-based insurance company, AerCap will release its claims against the insurer, Aeroflot, Rossiya Airlines, and other reinsurers related to the aircraft and engines.
“The amount of our separate US$3.4 billion claim against the “All Risks” insurers under our contingent and possessed insurance policy that relates to these 17 aircraft and five spare engines is approximately US$908 million,” AerCap noted in the filing, adding that the settlement proceeds reduced its claim to around $2.75 billion.
The transaction of the funds was approved by the US Department of Commerce (DOC) and the US Department of the Treasury (USDT), since Russia and its banks were sanctioned by the country following its invasion of Ukraine in February 2022.
AerCap is still involved in several other insurance settlement discussions with other Russia-based carriers but warned that “it is uncertain whether any of these discussions will result in any insurance settlement or receipt of insurance settlement proceeds and, if so, in what amount”.
The lessor also noted that it remains unclear whether the authorities will allow the funds to be transferred in case of another settlement agreement.
According to ch-aviation.com data, AerCap’s owned aircraft portfolio totals 1,799 units, with the lessor managing a total fleet of 1,897 aircraft (owned and managed).
In a previous case, a US judge ruled in favor of another lessor, BOC Aviation, asking Russia’s Volga-Dnepr Airlines to pay more than $400 million for defaulting on three Boeing 747-8F leases. BOC Aviation recovered one of the aircraft, while the other two are still stuck in Russia.