AirBridgeCargo, Russia’s largest cargo airline, has been ordered by a district court in the US to pay an aircraft lessor millions of dollars for going into default on leases since last year. The leasing company, BOC Aviation, reportedly leased three Boeing 747-8 freighters to the Moscow-based airline.
Due to the international sanctions following Russia’s invasion of Ukraine, BOC Aviation was initially unable to get the 747s back. Now, the company has reportedly retrieved one aircraft with missing parts, while the other two remain in Russia.
Responsible for the aircraft
The ruling took place at the United States District Court for the Southern District of New York after a non-jury trial that lasted one day on April 3rd. Since the 747-8Fs were left in Russia, AirBridgeCargo and its Amsterdam-based parent company, Volga-Dnepr Logistics BV, were found liable for the three freighters by US District Judge Lewis Liman in Manhattan. According to Reuters, lawyers for the defendants did not respond to a request for comment on the situation.
BOC Aviation reportedly said that the defendant, AirBridgeCargo, went into default after failing to maintain the required reinsurance coverage, which coincided with the restrictions imposed by the European Union against airlines in Russia. The restrictions concerned used aircraft in the country, while sanctions were on foreign assets, including aircraft that were leased internationally, according to Reuters.
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The judge’s dismissal
Liman rejected AirBrigeCargo’s defense that neither the airline nor BOC Aviation could have predicted the circumstances. The cargo carrier also argued that it was impossible to keep the aircraft grounded outside Russia because Moscow allegedly ordered them to be returned to the country. The judge also reportedly dismissed that argument.
In the 57-page decision, Liman determined that BOC Aviation had provided proof of evidence that the Russian government had effectively taken hold of the 747s and their parts by preventing them from being utilized outside of the country, ordering AirBridgeCargo to pay BOC Aviation $406.2 million.
BOC Aviation has since recovered one 747s, but it is missing two engines. The remaining two aircraft and the two engines of the plane it retrieved are still in Russia. According to ch-aviation, VQ-BFE, a 747-8F leased to AirBridgeCargo from BOC, returned to the US in March of 2022 after the lessor won an order by a US court to have possession of the freighter.
At that time, the cargo airline had reportedly ignored instructions from BOC Aviation to ground two additional 747s in China, violating its lease agreements. Instead, the carrier had flown the two freighters, VQ-BFU and VP-BIN, to Moscow, although the airworthiness certificate of one of the planes was suspended, according to ch-aviation. Both aircraft are now reportedly in storage at Sheremetyevo International Airport in Moscow.
Has this been a trend?
Primarily in European courts, aircraft leasing companies have sued several insurers and lessees for billions of dollars over hundreds of aircraft stuck in Russia since the invasion of Ukraine.
Other airlines have reportedly shared similar arguments to AirBridge Cargo’s regarding the seized aircraft. However, according to Reuters, the lack of standardized terms and confidentiality agreements in the industry has made it challenging for lessors to organize their claims into one class action.
Sources: Reuters, ch-aviation