AerCap Submits $3.5 Billion in Insurance Claims

AerCap Holdings NV says it is currently stuck in Russia following the imposition of western sanctions after it filed for $3.5 billion in insurance claims for more than 100 jet airliners leased to Russian airlines.

The company has said that it has rented 135 aircraft to Russian carriers, and has been able to recover only 22 of them. European and US sanctions needed lessors to cancel contracts and have banned western companies from providing maintenance and spare parts for those planes left behind.

The aviation industry has been shaken by the effects of Russia's invasion of Ukraine, forcing airlines to suspend and reroute flights. With more than 400 chartered Western jets remaining in Russia, industry experts could trigger years of battle between plane owners and insurance companies for an estimated $10 billion in damages.

The chief executive of AerCap, Gus Kelly, has said that the company has filed insurance claims on its planes in Russia, which represented around 5%of its portfolio of estimated 1,750 aircraft.

The company estimates its current exposure to Russia at about $2.5 billion and said it could collect unspecified plane loss charges as early as this quarter prior to potential insurance payments.

The leasing companies and insurers said they were discussing the possibility of payouts on the fleet, many of which are still operated by airlines such as Aeroflot Russian Airlines PJSC. Mr Kelly said he hopes the insurers will contest the claims.

Other aircraft leasing companies say they face major legal and logistical challenges in retrieving aircraft. European Union sanctions required the termination of existing leases with Russian airlines by March 28.