Summary
- The Russian government purchased 92 foreign-built planes seized in consequence of the War in Ukraine for $2.06 billion.
- S7 Airlines is about to receive 45 of the purchased planes, nearly half of its fleet.
- Reregistering the planes as Russian-owned allows S7 to avoid international sanctions and fly them on many international routes again.
Through multiple agreements with foreign lessors resembling Irish leasing giant AerCap, the Russian government has negotiated a virtually $2.06 billion purchase for 92 foreign-built and foreign-owned aircraft that were seized in the course of the War in Ukraine. In line with industry sources including , a complete of 92 jets that Russian authorities had seized will probably be purchased and reregistered because the property of three major Russian airlines.
Russian carrier S7 Airlines will probably be the principal recipient of those purchased jets, with 45 of the aircraft joining entering the carrier’s asset book. These planes are primarily medium-haul narrowbodies, resembling the Boeing 737 and Airbus A320.
Deals for one more 28 aircraft have also been closed, with this group of jets set to be reregistered under the ownership of state-owned flag carrier Aeroflot. The ultimate 19 aircraft are set to turn out to be officially the property of Ural Airlines.
S7’s aircraft
In line with Russian media outlet , S7 Airlines was in a position to negotiate an agreement with AerCap, Air Lease Corp, and SMBC Aviation Capital amongst other lessors for the 45 jets that may soon be registered because the airline’s. Because the carrier currently only operates 101 aircraft, including 84 A320 and 737 family jets, the group of purchased planes represents nearly half of the airline’s fleet.
Photo: Art Konovalov | Shutterstock
Russian news sources have also been quick to notice that negotiations are ongoing and that more aircraft could soon be transferred to company ownership. S7 Airlines stands out amongst other Russian carriers because it is the most important privately owned carrier within the nation, commencing operations shortly after the autumn of the Soviet Union in 1992.
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As a non-public institution, the airline sits in a singular position in terms of navigating the international sanctions imposed on Russian corporations within the wake of the nation’s invasion of Ukraine. By reregistering these planes as Russian-owned, S7 will have the opportunity to avoid the sanctions imposed on foreign-owned jets and may fly them on international routes without the fear of seizures.
What do the lessors think?
When Russia invaded Ukraine and international firms attempted to reclaim aircraft that had been leased by Russian carriers, many did not get well their jets and the planes remained in operation for airlines like S7 and Aeroflot. Consequently, these sanctions imposed a heavy financial burden on lessors, who were quick to file insurance claims for his or her property.
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Nonetheless, it seems that within the wake of this purchase, most lessors are still mostly unsatisfied with their situation. In line with reports from Flight Global, AerCap has released claims against Russian insurance firm NSK but had the next words to share regarding other outstanding filings still under negotiation:
“It’s uncertain whether any of those discussions will end in any insurance settlement or receipt of insurance settlement proceeds and, in that case, in what amount.”
The larger picture
There are undoubtedly fears about corporations paying large sums of cash to any Russian entity, and lessors have attempted to reassure the general public’s concerns. In the identical statement to Flight Global, AerCap indicated that each one its deals abide by the latest terms of international sanctions.
Photo: viper-zero | Shutterstock
With these jets now re-registered under Russian ownership, the nation’s international aviation industry will probably be able to expand operations. Routes that were once unimaginable to fly resulting from the fear of sanction-related aircraft seizures will soon be flown again.