The economic consequences of the war between Russia and Ukraine have reached yet another sector, that of the airlines. After several international companies paralyzed their activity in Russian territory, hundreds of planes have been stranded waiting to be recovered.
The problem arises when it is taken into account that Russia has no intention of returning them after the sanctions that the West has imposed against the country.
Furthermore, this comes at a time when Russian President Vladimir Putin has openly mentioned the possibility of nationalize the assets of foreign companies located in the territory.
More than 500 planes are stranded in Russia
According to the IBA consultancy, Russia owns 523 aircraft that other Western companies had leased from Russian airlines, of which 101 are held by S7 Airlines and 89 by Aeroflot.
The problem is that both companies have stopped flying internationallyso any chance of these planes landing outside Russian borders has been eliminated.
Experts agree that it will be impossible to recover those shipsas assured to The New York Times Embry-Riddle Aeronautical University finance professor Vitaly Guzhva.
Companies face billions of dollars in losses
On the other hand, the professor also analyzed the economic consequences of this situation, while the airlines face billions of dollars in losses.
As a starting point, it should be noted that a single aircraft can cost up to 12,000 million dollarsso these companies that have leased the most planes to Russian airlines could suffer a real catastrophe if they do not recover these assets.
This is the case for AerCap, the world’s largest commercial aircraft leasing company. This firm has 142 aircraft leased in Russia, surpassing any other company. This multinational faces the loss of 5% of its fleet.
Similarly, SMBC Aviation Capital has lost 35 planes on Russian soilmaking it the second most exposed company.
The airlines only have 15 days to recover the planes
The problem becomes more serious when it comes to the fact that these companies they only have 15 days to retrieve their planes.
Companies such as AerCap or SMBC Aviation Capital face severe European sanctions if they do not terminate their contracts with Russian airlines before March 28so if they don’t get the ships back before this date there will be no chance of bringing the assets back.
David Walton, director of operations at BOC Aviation, pointed out how “unrealistic” that date is for a situation that requires the movement of hundreds of planes, in addition to the tough negotiations that will have to be carried out with a country that is not willing to give in
In this case, Boc Aviation only has 18 ships on Russian territoryalthough that means 4.8% of its fleet.
The value of planes falls by the minute
To this situation we must add one more problem, these planes are being devalued at times. These ships have to go through maintenance records every day.
The companies are in charge of carrying out a daily analysis of both the body, the engine and the flight systems of the plane, tests that, in addition, they have to register.
For this reason, every day that the asset is kept in Russian territory loses value. In fact, if the companies do not have these records, the plane is practically unusable.
Other sectors will be affected
This situation does not only affect the airline sector. Banks, leasing companies and securitized debt investors are the ones financing these planes, so they too will be hit.
On the other hand, insurers will also have to face the payment of hefty premiums for the loss of these assets.
This is the AN-225, the largest plane in the world, which Russia has destroyed in the war with Ukraine
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