Aircraft leasing companies have launched a multinational effort to persuade safety authorities to allow grounded planes that were returned from Russia without full maintenance records back into commercial service.
Declan Kelly, chairman of Aircraft Leasing Ireland, said the trade body had begun an “asset preservation study” with regulators in Europe, the United States and Bermuda to “come up with a mechanism of how to repatriate those aircraft into our global system”.
Sanctions imposed on Russia following its invasion of Ukraine triggered a global rush among overseas leasing groups to recover more than 500 aircraft worth an estimated $10 billion (€9.3 billion) that were stuck in the country. Irish aircraft leasing groups are among the worst affected, with planes worth more than $4 billion leased to Russian airlines.
Lessors have been able to recover 41 planes with an estimated market value of $770 million since the start of the conflict, according to estimates by aviation consultancy Cirium.
However, Mr Kelly said “many of the aircraft do not have a full suite of maintenance records”. Such records, usually handed back at the end of each lease, are crucial both for validating aircraft value and for obtaining insurance.
The Kremlin passed a law last month allowing foreign aircraft leased by its airlines to be added to the country’s domestic register, in effect allowing them to keep flying domestically.
Safety checks
Lessors now face the prospect of putting each aircraft through lengthy and expensive maintenance and safety checks to reconstruct its records.
“We want to get the aviation authorities to accept that, on the 27th of February, all those aircraft were operating safely under the Russian system,” Mr Kelly told the Financial Times. “While some maintenance is to be done and there will be additional costs, you don’t want to tear the aircraft apart.
“Our whole point is: you cannot just ring-fence these into aircraft that can never operate again.”
Industry executives contacted by the FT privately welcomed the initiative but cautioned that lessors faced an uphill battle in persuading authorities such as the EU Aviation Safety Agency and the US Federal Aviation Administration to allow the planes back into service without full records. “It is a safety issue. No compromises,” said one executive.
Rob Morris, head of consultancy at Ascend by Cirium, did not rule out a return to service for the planes, noting that lessors were likely to have at least some of the records replicated in their own management systems.
“In time I do suspect that we will see the majority of these 40 aircraft back in service and indeed several of them are likely to do so as freighter aircraft, following passenger-to-freighter conversions,” he said. – Copyright The Financial Times Limited 2022