- Aircraft leasing companies may have to say goodbye to over $10 billion worth of planes stranded in Russia.
- Russian authorities and airlines have made it difficult for lessors to get the planes back by the March 28 deadline.
- Russia banned international flights citing a "high risk of Russian airlines' planes being held or seized abroad."
Aircraft lessors have until March 28 to get their planes out of Russia, but analysts say they may be "gone forever."
On February 27, the European Union required all aircraft leasing companies to cancel their contracts with Russian airlines as part of sweeping sanctions to punish President Vladimir Putin for invading Ukraine. Officials gave lessors 30 days, meaning some $12 billion worth of planes needed to be flown out of Russia and returned to their owners by the deadline.
However, Russian authorities and carriers are not making it easy. So far, lessors have only repossessed 24 of the over 500 leased Airbus and Boeing jets in the nation, according to Valkyrie BTO Aviation general counsel Dean Gerber, Bloomberg reported.
This includes a Nordwind Airlines Boeing 777 plane that was detained in Mexico after flying a cargo-only service to Mexico City on February 26, airline intelligence provider ch-aviation reported.
Since the sanctions went into effect, analysts expected lessors to face problems getting their aircraft out of Russia due to airspace restrictions creating logistical challenges and pushback from Russian authorities. According to aviation consultancy IBA, Dublin-based leasing company AerCap has the largest fleet in Russia at 152 planes that are worth nearly $2.5 billion.
Russia's aviation regulator, Rosaviatsiya, exacerbated the issues by banning international flights to ensure flag carrier Aeroflot and other airlines could keep the hundreds of planes in their possession, saying in a Saturday statement that there was a "high risk of Russian airlines' planes being held or seized abroad."
An estimated $10.3 billion worth of aircraft may not make it out of Russia, according to aviation consultancy Ishka.
"The number one fear right now is that these aeroplanes are gone forever, Steve Giordano, managing director of Nomadic Aviation Group, which specializes in aircraft repossessions, told Bloomberg.
Leaving lessor planes on the ground in Russia could lead Russian airlines to "cannibalize" the jets, meaning taking parts to use on other aircraft currently in operation. Carriers may resort to this strategy due to sanctions barring Boeing and Airbus from sending spare parts to the nation.
Without the supplies, aircraft could go without necessary repairs to keep them airworthy, forcing Russian companies to take from lessor planes, buy uncertified parts from China, or find pieces in Iran's seedy under-the-table inventory.
"The lessors may end up having to take a writeoff," Nick Cunningham, an analyst with Agency Partners, told Bloomberg.