For the first six months that ended 30 June 2022 , BOC Aviation included the write-downs of US$804 million related to the net book value of aircraft remaining in Russia.
Net loss after tax of US$313 million, compared with net profit after tax of US$254 million in the first half of 2021.
However ,the value is partially offset by US$223 million of cash collateral held by the Group in respect of those aircraft and US$63 million of tax credits, resulting in an after tax impact of US$518 million
Excluding this impact , BOC Aviation's core net profit after tax (“NPAT”) was US$206 million.
Western Sanctions due to the Russia-Ukraine war have forced aircraft lessors to cancel their deals with Russian airlines, and they have since struggled to reclaim their aircraft.
Lessors are trying to recover their aircraft by multiple ways , few of them through regulatory authority flying bans on Russian aircraft , but success does not come easy.
This was among the reasons , BOC Aviation seems to have decided to write down the 17 aircraft held at Russia.
It's media release reads ,
BOC Aviation reported net loss after tax of US$313 million for the first half of 2022. The primary reason for the loss is the write-down of the net book value of 17 aircraft that remain in Russia of US$804 million. This was partially offset by cash collateral held in respect of those aircraft of US$223 million and tax credits of US$63 million. Excluding this impact, our core net profit after tax (“NPAT”) was US$206 million.
Leasing major AerCap's $3.5 billion claim exceeds the $2.5 billion value of its assets stranded in Russia , which include 113 planes and 11 engines, following the recovery of 22 planes and three engines.
Not easy for Insurance companies as well , Insurers are going to face a yearslong legal battle with aircraft leasing firms over a potential $15 billion claims bill from jets stranded in Russia because of the Ukraine war.
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