- A US aircraft leasing company will write off the value of 27 of its jets stranded in Russia.
- The writedown is expected to cost the company $802 million, according to a Reuters report.
- Air leasing companies are going through a rough patch because of new Russian laws and EU sanctions.
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An American aircraft leasing company said it would write off the value of dozens of its jets stuck in Russia, according to Reuters.
According to the outlet, Air Lease Corporation had 27 jets stranded in Russia after Western-imposed sanctions came into effect following Russia’s invasion of Ukraine.
The writedown is expected to cost the company $802 million.
“It is unlikely that the company will repossess the unreturned aircraft remaining in Russia,” Air Lease said in a statement.
Air Lease Corporation did not immediately respond to Insider’s request for comment outside of normal business hours.
Since the start of the war between Russia and Ukraine, the aviation industry has been hit hard. Air leasing companies in particular have borne the brunt of these sanctions, forcing them to terminate their contracts with Russian airlines.
On February 27, the European Union banned “any aircraft owned, chartered or otherwise controlled by a Russian legal or natural person” as part of its sanctions against Russia.
Officials gave lessors 30 days to take back their fleets, according to consultancy Ishka, meaning around $12 billion worth of planes had to be flown out of Russia and returned to their owners by the deadline.
However, airspace bans in Russia, Europe and the US have created complications for air leasing companies who come to Russia to repossess planes.
Just last month, Russia also signed a new law allowing the seizure of hundreds of Western-built planes operated by Russian airlines. The jets – originally owned by international aircraft rental companies – will be added to the country’s aircraft register to be used on domestic routes, according to Reuters.
Air Lease isn’t the only company facing problems. The world’s largest aircraft leasing company, AerCap, grounded more than 100 jets in Russia and subsequently filed a roughly $3.5 billion insurance claim for lost assets.
According to Reuters, Air Lease will lay off 21 company-owned jets and six planes in its management fleet. It told the outlet it would be making insurance claims to compensate for losses on its jets stranded in Russia.