International sanctions on Russia in the aviation sector have triggered a global scramble by overseas plane lessors to recover $10 billion worth of aircraft stuck in the country.
Following the invasion of Ukraine, international sanctions were imposed on key Russian individuals and industries. One of the big targets was the Kremlin’s aviation sector.
This triggered a global scramble by aircraft owners to get their planes out of Russia before the sanctions came into effect. Some 515 leased aircraft worth an estimated $10 billion were stuck in the country, according to data and analytics firm Cirium.
“From a legal perspective, it’s probably the most significant story in aviation,” said Paul Jebely, chair and founder of the Hague Court of Arbitration for Aviation, a specialized court to mediate disputes in the aviation industry.
“It’s been earth-shattering. I don’t recall in 15-plus years of practice there ever being a situation quite like this, both on magnitude and on scope,” he added.
Accusations of theft by the Russian state came after the Kremlin signed a new law on March 14, about two weeks after its invasion of Ukraine. The law allowed foreign jets to be re-registered in Russia. This made it possible for the jets to fly domestically but doing this without the sign-off from the plane’s original owners is illegal.
Six months after the crisis began, lessors were able to recover 80 aircraft, leaving 435 aircraft still stranded, with an approximate market value of $8.5 billion, Cirium estimated.
Meanwhile, the businesses that rent out these aircraft were trying to work out how to recover their assets and avert a crisis. Irish aircraft leasing groups are among the worst affected, with more than $4 billion worth of planes leased to Russian airlines.
Learn more about why Ireland has been particularly affected in the video above.