Aeroflot, Russia’s biggest airline, has bought eight Airbus A330 aircraft from foreign leasing companies, the carrier said on Friday. According to the Russian operator, it bought these jetliners “as part of the fulfillment of contractual obligations.” Let’s investigate further.

Buying the aircraft

Since the beginning of Russia’s invasion of Ukraine, foreign leasing companies have been heavily impacted after being unable to recover their stranded planes in Russia. More than 400 aircraft leased from Western firms are currently grounded in Russia. The value of these planes is nearly US$10 billion.

On Friday, Aeroflot informed Reuters it had bought eight Airbus A330 aircraft from foreign leasing companies. However, it did not specify which firms the planes had been leased from.

As reported by Reuters, the purchase could be a bid to maintain good relations with lessors.

There’s an exemption to European Union sanctions against Russia in respect of aircraft financial leases. This exemption involves purchase when the lease ends.

Looking at Aeroflot’s Airbus A330 fleet

Aeroflot has a fleet of 12 Airbus A330-300, according to data provided by ch-aviation. Eight of these planes are under a financial leasing contract and are owned by Vistavia Ireland DAC and Aviasky Ireland DAC.

A finance lease is where the aircraft is owned by the bank (or its special purpose company), and regular lease payments are made by the airline to the bank until the full amount is paid, and the airline owns or has the option of purchasing, the aircraft.

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GECAS owns two additional A330-300s operated by Aeroflot, Goshawk one and AerCap another. The latter is the only one that does not have a Russian registration. Instead, it has a registration from Bermuda, VQ-BMV.

Overall, in Russia, there are 26 Airbus A330-300s, according to ch-aviation. The remaining planes are operated by iFly Airlines (seven) and Nordwind Airlines (seven). They are mostly leased to Western lessors, including GECAS, CDB Aviation, Carlyle Aviation Partners, and more. Nonetheless, iFly Airlines leases two from DAE Capital, a Dubai-based lessor.

The impact on the leasing companies

The leasing companies are losing billions in assets currently frozen in Russia. To cope with the impact, leasing firms have initiated lengthy insurance claims to try to recover some of the lost value of the aircraft.

AerCap, the world’s biggest aircraft lessor, has submitted the most significant claim, a US$3.5 billion insurance claim for more than 100 jets.

According to Cirium, there were 515 commercial jets and turboprops leased to Russian airlines by non-Russian lessors at the start of the conflict. In late February, 39 of them were already outside of Russia and thus probably no longer on lease in Russia. Additionally, another 41 planes have been repossessed successfully since the conflict began.

For the remaining 435 aircraft, Cirium expects their future to look bleak. Rob Morris, global head of consultancy at Ascend by Cirium, wrote,

“It seems likely that for their rightful owners' insurance will be the only recourse to reclaiming value for those assets in the long term and that many of these assets will never again be seen in international markets.”

What do you think about Aeroflot acquiring eight Airbus A330s? Let us know in the comments below.

Source: Reuters.