A recent Irish High Court filing shows , BOC Aviation Ltd. — the Singapore-based aircraft operating leasing company , has initiated the legal action in pursuit of claims against 16 insurers over aircraft the lessor owns that are stuck in Russia.
The company in an earlier filing said that it had decided to cut the net book value of 17 leased aircraft remaining under control of Russian airlines to zero from $803.6 million.
The company's stand was ,
"it is unlikely to be able to recover those aircraft from Russia in the foreseeable future, if ever." It has recovered only one from the country so far since the start of the war in Ukraine.
The net impact of the write-down to its pretax profit was $580.7 million, as it will be partially offset by cash collateral of $222.9 million from the airlines. Nevertheless, the company couldn't avoid a net loss of between $310 million and $330 million for the first half of the year , compared to a profit of $254 million a year ago.
But now , the company has decided to drag the Insurers to Court , and the list of insurers named in the legal proceedings , which the filing shows were issued on Nov.3, include Lloyd's of London Ltd , AIG Inc, Chubb Ltd and Swiss Re AG.
Size of the Company's claim against the Insurers is yet to be learned, and the Insurers did not release their reactions against the Legal action as of now.
Most regional and global lessors acknowledged months ago that they have sustained financial losses due to European Union sanctions requiring the termination of all aircraft leases with Russian companies by March 28.
Leasing firms have begun pursuing claims over huge losses since losing control of more than 400 leased planes worth almost $10 billion after Western countries sanctioned Russia over its February invasion of Ukraine and Moscow blocked the jets from leaving.
While the EU sanctions only apply to companies operating in the bloc's member states, many Asian leasing companies base their operations in Ireland for tax reasons. In response to the sanctions, Russia has moved to allow its airlines to hold on to their leased planes and re-register them locally.
BOC recognised an $804 million asset write-down in August relating to the 17 aircraft it owns that remain in Russia, saying it was unlikely to be able to recover the jets "in the foreseeable future, if ever".
BOC said in August that it had filed insurance claims to recover the losses and would vigorously pursue them. Its Chief Executive Robert Martin told analysts in August that the proceedings "will keep lawyers busy for many years" and may require a complete rethinking of aviation insurance.
Dublin-based AerCap Holdings NV, the world's biggest aircraft lessor , in June filed a $3.5 billion lawsuit at London's High Court over its insurance claim for more than 100 seized planes, the largest claim by any lessor related to the conflict.
Other major lessors including Avolon and Dubai Aerospace Enterprise (DAE) have also begun proceedings. China Aircraft Leasing Group Holdings , another listed mainland aircraft lessor, said in its annual report in early April that it owned two aircraft being leased to two Russian carriers with a total value of 635.5 million Hong Kong dollars ($81 million).
BOC Aviation has a fleet of 612 aircraft owned, managed and on order. Its owned and managed fleet was leased to 81 airlines in 38 countries and regions worldwide as at 30 September 2022.
