Aeroflot Group and BOC Aviation Settle Dispute: $208 Million Agreement Reached

In a major development, Aeroflot Group has successfully concluded a settlement with lessor BOC Aviation, resolving issues surrounding eight aircraft and one additional aircraft under management. The agreement, valued at $208 million, signifies the completion of negotiations between the parties, bringing clarity to the ownership transition and settling claims.

Aeroflot Group announced that the ownership of the nine aircraft, which were previously under leasing agreements, has now passed to the Russian state insurance company NSK. This transfer follows a cash payment made by NSK as part of the settlement amount. The lessor, BOC Aviation, a Singapore-based entity owned by Bank of China, has ceased its claims against Aeroflot and its subsidiaries, Pobeda and Rossiya, as outlined in the leasing and insurance agreements.

The statement from Aeroflot Group emphasized that ongoing discussions are underway with other lessors of foreign-made aircraft that have been detained in Russia due to international sanctions following the Ukraine invasion. However, specific details of these negotiations were not disclosed.

In a voluntary announcement to the Stock Exchange of Hong Kong, BOC Aviation provided additional insights. The lessor’s subsidiary, BOC Aviation (Ireland), received the $208 million cash payment as part of an insurance settlement with NSK. This settlement pertains to eight aircraft that were formerly leased to Pobeda. Importantly, BOC Aviation has released its claims against NSK, Pobeda, and other relevant parties in Russia concerning these aircraft.

BOC Aviation affirmed that the insurance settlement and the receipt of the settlement proceeds comply with all applicable sanctions regimes. While the lessor remains committed to exploring opportunities for the recovery of the full value of all detained aircraft in Russia, the exact value of potential future recovery remains uncertain.

The resolution of this dispute marks a crucial step in stabilizing relations between Aeroflot Group and BOC Aviation, shedding light on the complex dynamics of aircraft leasing in the context of international sanctions. Stay tuned for further updates as the aviation industry navigates through these intricate challenges.