SMBC Aviation Capital says that total recoveries from jets stranded in Russia have reached US$1.41bn, according to a report by Reuters.
This development comes after the company received a further US$654m from insurance settlements over the past year.
For context, the Ireland-based lessor recorded a US$1.6bn impairment in 2022 after 34 of its aircraft were grounded in Russia.
The aircraft were grounded as Western nations imposed strict sanctions against Moscow over its February 2022 invasion of Ukraine. These included an order for aircraft lessors to terminate all leases with Russian airlines.
In October last year, the Irish firm also received US$710m for 16 jets leased to Russia’s state-owned airline, Aeroflot. The insurance claim was covered by Aeroflot’s policy, with the payout managed by Limited Liability Company ‘Insurance Company NSK’, a Russian insurance provider.
SMBC is one of several lessors that took multiple insurers to court in 2022 in a US$8bn lawsuit over more than 400 leased planes that were unable to leave Russia due to the sanctions. In October 2023, CDB Aviation received a settlement of 1.42bn yuan (US$197m), while BOC Aviation successfully secured an insurance settlement of US$208m a month later.
SMBC filed against Lloyd’s of London in November 2022 but did not disclose the size of its claim. Both parties reached a settlement last month.
(Re)in Asia spoke to industry experts in February last year, who warned that major legal cases related to the grounding of jets in Russia—taking place in Dublin, London, and the United States this year—could disrupt Asian markets. Large settlements that firms may face could raise concerns about their financial stability, although insurers, being awash in capital, might soften the impact.
Experts also expect these developments to prompt a review of the wording in aviation insurance policies.
