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IconNovember 9th, 2022
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Alc Is Currently Operating at a Loss of $18 Million per Quarter

Leasing a plane can be expensive. When some planes are detained in Russia, the costs to Lease Corporation go up. They lost out on $18 million in earnings during the third quarter of their current fiscal year.

Russia’s invasion of Ukraine

In February 2019, the Russian government decided to invade Ukraine, which led to billions of dollars’ worth of damages within the commercial aviation industry. Hundreds of leased Russian aircraft were stuck inside the country’s borders. This included Western-owned planes under Russian leases. As of July 2021, Washington Post reported that Russia still held more than 400 Western-owned aircraft worth $700 million in damages covered by insurance policies. Recently, it was reported that Carlyle Aviation is requesting $700 million in damages from their insurers over policies covering 23 aircraft that have been grounded in Russia. The impact of Air Lease Corporation’s (ALC) Russia exit wasn’t as strong as other leasing companies. In March 2022, it terminated all its businesses in Russia, which consisted of 24 aircraft in its owned fleet, eight managed aircraft, and the leasing activity related to 29 aircraft that had not yet been delivered from its order book. These jetliners were placed with other carriers; however, 21 ALC managed jets remained stuck in Russia. ALC Limited understands that it is unlikely to regain possession of the aircraft in Russia. As a result, it has recorded a write-off totaling approximately $802.4 million which includes $215.6 million to dispose of 21 aircraft from its fleet as of March 31, 2022.

One plane was recovered in the third quarter

In October 2022, Air Lease Corporation recovered one 737 Max aircraft which had been detained in Russia since the grounding of the aircraft in 2019. The leasing company does not anticipate any other returns from countries beyond Russia. One aircraft currently owned by Air Lease Corporation and six jetliners managed by it, were still detained in Russia as of November 3, 2022. The operators of these planes have continued to fly most of them despite the termination of leasing activities and ongoing demands for the returns of the assets, said the company. Between these 20 aircraft (plus the plane returned in October), they provided around $18 million per quarter in rental revenue to Air Lease Corporation.

What aircraft are detained in Russia?

ch-aviation reports that there are 25 aircraft owned or managed by Air Lease Corporation in Russia. These planes are operated by four carriers, Nordwind Airlines, S7 Airlines, Ural Airlines, and iFly Airlines. Sharing. S7 Airlines has a fleet of 13 aircraft and six Airbus A320s, two Airbus A321ceo, with five Airbus A321neos as well. Nordwind Airlines has six aircraft in total, including two A321neos and four Boeing 737-800s. iFly Airlines has four Airbuses  

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