Two of the world’s largest aircraft leasing companies, Avolon and BOC Aviation, have reached settlements with insurers over claims related to aircraft stranded in Russia following Western sanctions in 2022, the companies announced on Wednesday.
The lessors had sued insurers in Ireland’s High Court as part of a wider effort by the global aviation industry to recover at least $8 billion in losses from over 400 aircraft stuck in Russia. The lawsuits stemmed from sanctions imposed on Moscow following its invasion of Ukraine, which led to the termination of aircraft leases with Russian carriers.
Major Lessors Drop Lawsuits
Avolon and BOC Aviation said they had discontinued their legal proceedings in Ireland after reaching commercial resolutions with their insurers. However, the companies did not disclose the financial details of the settlements, citing confidentiality agreements.
A source also confirmed that Nordic Aviation Capital, a smaller lessor, had similarly ended its legal battle.
Meanwhile, SMBC Aviation Capital, another major lessor, announced it had reached settlements with Swiss Re and Scor Europe, two of the 18 insurers it is suing in the Irish courts. The broader lawsuit involving six lessors remains ongoing.
Spokespersons for CDB Aviation, Nordic Aviation Capital, and Hermes Aircraft, which are still pursuing claims in Ireland, did not immediately respond to requests for comment.
Legal Battles Continue in London and Beyond
While BOC Aviation has settled in Ireland, it confirmed it will continue its legal battle in London’s High Court. A separate trial involving another group of aircraft lessors began in London last year.
The Irish High Court case, which began in June 2023, involves around €2.5 billion in insurance claims. The trial has been described as the largest in Irish history by the number of legal representatives involved.
Avolon and BOC’s lawsuit targeted more than a dozen insurers, including major players like Lloyd’s of London, Chubb, and Fidelis.
Massive Losses and Settlements
Dublin-based Avolon, the world’s second-largest aircraft lessor, recorded a $304 million write-down in 2022 after 10 of its aircraft were stranded in Russia. Singapore-based BOC Aviation, one of the industry’s top five leasing firms, took an even larger hit, writing down $804 million for 17 aircraft.
Since the lawsuits began, some lessors have disclosed settlements with Russia amounting to more than $2.5 billion for over 100 aircraft. These deals involved transferring ownership of the planes to Russian airlines, allowing lessors to recoup at least part of their losses.
Ireland’s Role in the Leasing Industry
Ireland is a key battleground for these legal disputes, as more than 60% of the world’s leased aircraft are owned or managed by firms based in the country. The outcome of these cases could set a precedent for similar legal battles being fought in the U.S., London, and other jurisdictions.
While some lessors have reached settlements, others continue their fight for compensation, ensuring that the global legal battle over Russia’s seized aircraft is far from over.