Air Lease Corporation (ALC) will take an $802.4 million write-off on its aircraft remaining in Russia and which are unlikely to be repossessed, the lessor said in an SEC filing on April 22. ALC writes off 802 million on fleet in Russia.
The write-off is for 21 owned and six managed aircraft, which were all placed with non-state-owned airlines in Russia. “In response to the sanctions (on Russia), the Company terminated the leasing of all aircraft leased to Russian airlines. The Company has determined that it is unlikely that the Company will regain possession of the aircraft that have not been returned and that remain in Russia”, it says in the filing. It adds: “The Company does not expect that the write-off of these assets will result in material future cash expenditures for the Company.” ALC had some 3.4 percent of its net book value fleet leased to Russian customers.
ALC said that it is “vigorously pursuing insurance claims to recover losses relating to these aircraft.” Already back in March during a JP Morgan briefing, Group Chairman Steven Udvar-Hazy said that ALC would seek insurance claims on the basis of assets having been confiscated or stolen by Russia. Following the issuance of sanctions in February, Moscow said that it would confiscate and nationalize aircraft and assets from ‘unfriendly countries’ and re-register and insure them in Russia.
On March 30, AerCap was the first major lessor to announce that it was to make an impairment on aircraft that had remained in Russia. The extent of the impairment is expected to be disclosed on May 17, when AerCap reports on its Q1 results. It has also issued a $3.5 billion insurance claim. ALC will present its Q1 results on April 28.
