AerCap Secures $572 Million Insurance Settlement for Russian Airlines’ Aircraft

AerCap, the Irish aircraft lessor, has successfully received a USD 572 million insurance pay-out from Russian insurer Limited Liability Company, Insurance Company NSK (NSK), fully settling claims against Ural Airlines (U6) and S7 Airlines (S7) related to aircraft and engines leased to these carriers as of February 2022.

The confirmation of the payment came through a December 22, 2023, filing with the US Securities Exchange Commission (SEC). The settlement covers 47 aircraft and five spare engines, with AerCap releasing claims against NSK, the Russian airlines, and their international reinsurers. The insurance settlements and receipt of proceeds were approved by the US Department of Commerce and the US Department of the Treasury, aligning with applicable sanctions regimes.

The filing revealed that AerCap had placed 18 aircraft and one spare engine with Ural Airlines and 29 aircraft and four spare engines with S7 Airlines. The lessor also highlighted an additional claim of approximately USD 836 million against its All Risks insurers under the contingent and possessed insurance policy, which will be amended to reflect the recent recoveries.

While discussions for insurance settlements are ongoing regarding remaining claims with S7 and other Russian airlines, the outcome remains uncertain. AerCap acknowledges uncertainties related to approvals, funding, and settlement amounts in these discussions. In the third quarter of 2023, AerCap had previously settled a USD 646 million insurance claim against aircraft formerly leased to Aeroflot and Rossiya, both subsidiaries of Aeroflot Group, with NSK as the insurer.

AerCap continues to navigate the complex landscape of insurance settlements and discussions in the aftermath of geopolitical events, seeking resolutions and recovering funds tied to its aircraft leasing arrangements in Russia.

Stay updated for further developments on AerCap’s insurance settlements and their impact on the lessor’s financial position and operational strategies.