A statement from Russian Deputy Prime Minister Yuri Borisov has confirmed that all Western planes still in Russia following the termination of leasing contracts earlier this week will remain in the country indefinitely.
Borisov said that all planes that have had leasing contracts ended have now been entered into the Russian aircraft register.
Irish lessors, which account for more than 60% of the world’s fleet of leased aircraft, had reportedly all ended their leasing agreements by this Monday, in line with European Union (EU) rules.
The EU deadline formed part of the package of economic sanctions imposed by the EU following Russia’s invasion of Ukraine.
Aviation has been a major concern for the re/insurance industry since the outbreak of the conflict, with analysts warning of the potential for historic losses if Russia goes ahead with its move to nationalise Western-made planes grounded within its borders.
And with Moscow having now confirmed that it will not be returning the stranded aircraft, the potential for a huge loss to lessors, and to re/insurers, now seems ever more likely.
It’s thought that at least 400 Western planes are still in Russia, with some commentators suggesting a possible loss of $10 billion if they cannot be repossessed.
Analysts at S&P, meanwhile, have fielded a worst-case insured loss scenario of $15 billion to aviation lines from the crisis in Russia, with another $20 billion of losses possibly set to stem from specialty lines, and further costs expected in cyber.