Air Lease Corporation Settles $64.9 Million Insurance Claim with NSK for S7 Airlines

Air Lease Corporation (ALC) has successfully settled a $64.9 million insurance claim with Russia’s NSK for three A320-200s and one A321-200 leased to S7 Airlines during the Russian invasion of Ukraine in February 2022. ALC disclosed the receipt of the settlement funds in a filing with the Securities Exchange Commission (SEC) on December 22, 2023.

The insurance settlements were approved by the US Department of Commerce and the US Department of the Treasury, aligning with applicable sanctions regimes. ALC terminated all leasing activities in Russia in March 2022 in response to the sanctions imposed following the invasion. Despite retaining title to the planes, the lessor acknowledged the challenge of regaining possession.

While ALC repossessed one managed B737-8 in October 2022, as of November 6, 2023, 20 aircraft from ALC’s owned fleet and six managed aircraft remain detained in Russia. Despite the termination of leasing activities, the operators have continued to operate most of these aircraft, with ALC demanding the return of its assets.

The settlement covers three A320-200s and one A321-200, and ALC notes ongoing settlement discussions for five additional A321-200s previously leased to S7 Airlines. As of December 31, 2022, ALC recorded a net write-off of approximately $771.5 million for its interests in Russia-placed owned and managed aircraft. Legal proceedings against insurers concerning these losses are underway in the Los Angeles County Superior Court of the State of California.

ALC emphasizes its commitment to vigorously pursuing all available insurance claims, highlighting significant claims against its aviation insurance carriers. The settlement with NSK aligns with recent resolutions of claims by other lessors, including AerCap and GA Telesis, reflecting ongoing efforts in the aviation industry to address financial implications and navigate legal complexities resulting from geopolitical events.

Stay tuned for further updates on ALC’s efforts and the evolving landscape of insurance claims in the aviation sector.