By Tim Hepher, Padraic Halpin and Conor Humphries
(Reuters) -The head of the world’s largest aircraft leasing company, AerCap, said on Wednesday that Russia may look to buy used aircraft or engines if and when its markets reopen, but that he saw no rush by Western lessors to return to the market.
Talks aimed at achieving a ceasefire in Ukraine have raised the prospect of a gradual reopening of Russia to Western firms, though the leasing industry remains scarred by the confiscation of some 400 jets following Moscow’s invasion of Ukraine in 2022.
Speaking to Reuters after reporting higher 2024 earnings, Aengus Kelly stressed that any business with Russia would have to be approved by the United States and European Union, which continue to impose sweeping economic sanctions against Moscow.
“Now, let’s say that occurs, then you’ll need insurance. I just don’t see insurance occurring, so that means leasing would be a very long putt,” Kelly said.
“However, sales are different. Could sales be done with individual asset approval? Possibly. It would be a long putt, but there’ll be a big surge in demand to buy used assets.”
Kelly said Western repair companies would be reluctant to work on airplanes that have been operating in Russia without current paperwork or approved parts, which would throw a wrench into the trading of parts even if sanctions are lifted.
“I think the real demand will come from discrete assets, like a whole engine or an aircraft. I think it will be difficult to say that an aircraft that has been in Russia has any intrinsic value,” Kelly added.
Aircraft lessors have been suing dozens of insurers over losses of at least $8 billion over planes trapped in Russia.
AerCap said on Wednesday it had booked settlements in the fourth quarter of $168 million. Kelly declined to comment when asked if the company was nearing any further agreements.
The AerCap CEO said the wider industry continued to face shortages of aircraft and engines, but supply chains were starting to improve – albeit with question marks over certification delays.
AerCap – the world’s largest owner of aircraft and engines – said it had ordered 118 new CFM LEAP jet engines in the fourth quarter. Last May, it bought 150 engines.
(Reporting by Tim Hepher, Padraic Halpin, Conor Humphries; Editing by Louise Heavens and Christina Fincher)
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