In an April 12 update, aircraft financier Air Lease Corporation confirmed it has 21 of its aircraft on lease to Russian customers.

The Air Lease Corporation (ALC) statement says it has 21 owned aircraft remaining in Russia. In March, it terminated the leases with the airline operators but has not yet repossessed the aircraft.

ALC says the 21 aircraft are 3.4% of their fleet's net value of $22.9 billion, around $779 million.

At the end of 2021, ALC had 382 aircraft in its portfolio, 278 narrowbodies and 104 widebody aircraft. It has 197 Airbus, 184 Boeing and one Embraer aircraft.

It has a customer base of 118 airlines in 60 countries. The fleet is widely dispersed, with Europe 33%, Asia 26%, China 13%, and the Middle East and Africa 11%. The balance is in the Americas and Australasia.

Some of ALC's Russian customers include S7 Airlines, Azimuth Airlines, Nordwind Airlines, Azur Air, Smartavia and Ural Airlines.

Will these aircraft ever make it home?

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Photo: Getty Images

Simple Flying contacted Air Lease Corporation to ask if the aircraft were in use and what avenues were open to the company to recover them from Russia. We will update this article with any response.

Since March 31, global leasing companies have been trying to repossess more than 400 leased aircraft from Russian airlines. Apart from the remaining 400, lessors have successfully seized 78 out of Russia.

On March 31, Bloomberg reported Russian Deputy Prime Minister Yuri Borisov said on TV,

"The entire fleet, meaning foreign aircraft, will remain in Russia. Some were impounded abroad as sanctions were being introduced but the vast majority of the Boeing and Airbus remain in Russia."

Moscow passed a law allowing the aircraft, worth close to $10 billion, to be placed on the Russian registry in contravention of international rules. The bulk of the fleet was registered in Bermuda and Ireland and had their airworthiness certificates canceled, which would typically ground them. Most, if not all, have been placed on the Russian registry.

Putin says it's time to go local

Russian President Vladimir Putin weighed in with the declaration that "Western partners deceived Russian companies by terminating aircraft supply and servicing and leasing agreement, adding.

"A month ago Europe and US companies unilaterally refused to perform their obligations under contracts with aviation service companies in Russia."

Putin also declared it an opportunity for local aircraft producers to grow their share of the Russian fleet over the next decade. "Certainly, with the provision of the high level of quality, reliability and cost-efficiency of our aircraft."

While significant to ALC and its investors, their potential liability pales to that of AerCap. Quickly taking action, AerCap has submitted a $3.5 billion insurance claim for more than 100 of its aircraft stranded in Russia.

AerCap, the world's largest aircraft lessor, has the largest exposure of any lessor, and its action may spur others to follow it down the insurance path.

When sanctions begin biting, Russian airlines may cannibalize parts off leased aircraft to effect repairs on other airplanes. If this is hidden and no records kept, lessors will end up with, assuming they get them back, significantly impaired assets.

It's been said that "an aircraft without accurate maintenance records is a pile of scrap metal."

Get set for some costly lessor v. insurer battles.

Source: Bloomberg