Irish aircraft-leasing firms plan to sever lease agreements with Russian airlines and recover their aircraft from Russia in compliance with EU sanctions, an industry group has confirmed.
Aircraft Leasing Ireland, the industry body affiliated with business group Ibec, said the EU sanctions against Russia over its invasion of Ukraine have “serious implications” for the aircraft leasing companies in Ireland who have aircraft on lease to Russian airlines.
All EU-based lessors have until March 28th to terminate existing contracts with Russian airlines and have begun the process of seeking to recover and repossess aircraft.
The multibillion-euro aircraft-leasing industry has a large exposure to the Ukraine crisis, with more than 200 Irish-owned aircraft leased to Russian carriers.
Aircraft Leasing Ireland said the group and its members are “committed to complying fully with the terms of the terms of the recently introduced EU sanctions”.
“We are monitoring this unfolding situation very closely and are working with the Irish Government, the EU and other authorities to ensure compliance with the sanctions in the timeframes as set out,” said the group.
“We understand our members are taking necessary action to cease leasing aircraft to Russian airlines and to recover aircraft from Russian operators and authorities.”
In a statement, the group expressed “deep shock and outrage at the devastating events that are taking place in Ukraine as a result of the Russian invasion”.
Aircraft leasing companies have written to Russian airlines seeking to terminate leases on Irish-owned aircraft worth billions of euro in order to comply with the sanctions.
Dublin-based AerCap, the world’s largest aircraft leasing company, is the most exposed to the impact of the sanctions, with 152 aircraft across Russia and Ukraine valued at almost $2.4 billion (€2.1 billion), according to industry figures.
This is followed by SMBC Aviation Capital with 34 aircraft valued at $1.3 billion.
Dublin-based Avolon, the world’s second largest aircraft leasing company, has 14 aircraft leased to Russian airlines, valued at €320 million.
The EU sanctions carry a blanket ban on all exports related to the aviation industry, including services such as aircraft leasing. The deadline to end agreements has put leasing companies under severe pressure to act quickly, with some repossessing aircraft at international airports.
Two other aircraft owned by Avolon and leased to Pobeda are currently being flown on domestic routes inside Russia.
Irish aviation industry veteran Ulick McEvaddy has described the task facing airlines recovering plans from Russia following the sanctions as “mission impossible”.