Irish lessors will be permitted to recover aircraft leased to Russia-based companies despite the closure of EU airspace to Russian planes as part of sanctions against the Kremlin following its invasion of Ukraine, senior EU officials have said.
The multibillion euro Irish aircraft leasing industry faces severe challenges ending leases and recovering Irish-owned aircraft from Russia as directed under the sanctions.
Aircraft leasing companies have written to Russian airlines that are currently leasing billions of dollars worth of Irish-owned aircraft seeking to terminate leases and start the recovery of the aircraft.
EU and US economic sanctions last week included a prohibition on the supply of aircraft and aircraft components to Russian entities or for use in Russia, forcing leases to be terminated by March 28th.
While concerns have been raised that Irish aircraft leasing firms would not be able to recover the assets and fly them back outside the sanctions, senior EU officials have said there are “exceptions in the regulations” to allow for the recovery of aircraft.
“Certainly there is,” they said during a technical briefing on aviation and airspace sanctions against Russia on Tuesday. “We are already in contact with several Irish leasing companies.
“But the regulations allow all planes which are EU-owned and operated by EU companies to come back. So if the plane is recovered by the leasing company it can fly in without any problems.
“There are some exceptions in the regulations that allow the possibility to fly back and overfly when leasing companies want to bring back to Ireland in this case the planes that are in Russia, so that should be no problem.”
However, Irish aviation industry sources fear the Russian airlines will ignore the calls from Dublin-based companies to ground the airlines and will continue to fly them on domestic routes within Russia.
There is also concern that the Kremlin could unilaterally act, passing a new law that would seize ownership of all aircraft in Russia by requisitioning the title of the assets.
Repatriation
Separately, the EU officials said there will be dispensations for flights to repatriate Irish citizens based in Russia who wish to return home.
“We know that Russia has also taken measures to close its airspace to our carriers,” they said. “We understand that some member states might be interested in organising repatriation flights.
“From our perspective, repatriation flights can take place but it has to be a genuine repatriation flight. It has to be with consular assistance. It has to be under certain conditions.
“If Russia is reciprocating we will assume they will allow similar repatriation flights, but again they have to be genuine repatriation flights.”
Dublin-based AerCap, the world’s biggest aircraft leasing company, has said it plans to sever leases with Russian airlines to comply with the sanctions.
It is the most exposed to the impact of the sanctions, with 152 aircraft across Russia and Ukraine valued at almost $2.4 billion (€2.1bn), according to industry figures.
This is followed by SMBC Aviation Capital with 34 aircraft valued at $1.3 billion. Dublin-based Avolon, the world’s second largest aircraft leasing company, has 14 aircraft leased to Russian airlines, valued at €320 million, representing less than 2 per cent of its assets.
