Irish units of AerCap, the world’s biggest aircraft leasing company, have launched a legal action in London against a Dutch subsidiary of Russian air cargo giant Volga-Dnepr, the Irish Independent has learned.
t’s thought to be one of the first cases taken by an aircraft lessor against a Russian client carrier, after billions of dollars worth of aircraft owned by western jet lessors were seized by the country following sweeping sanctions imposed following its invasion of Ukraine.
The legal action just commenced in London is being taken by four Irish units of Dublin-based AerCap, including Celestial Aviation Trading Ireland Ltd.
Some Celestial units had aircraft leased to Volga-Dnepr’s AirBridge Cargo subsidiary.
Separately last month, AerCap’s Ireland-based Celestial Aviation Services filed a $46m (€43.4m) case against UniCredit in London as the Italian bank had guaranteed aircraft leasing payments on behalf of Russia’s largest lender, Sberbank.
That claim relates to two Boeing 747-400 cargo jets leased to AirBridge, as well as other aircraft leased to Aurora Airlines.
AerCap, headed by CEO Gus Kelly, declined to comment on the action launched against Volga-Dnepr’s Dutch arm or say if it intends to pursue actions against other units of Russian carriers that are based outside Russia.
Prior to the invasion of Ukraine and related sanctions, AerCap had 135 owned aircraft and 14 owned engines on lease to Russian airlines.
The net carrying value of those assets was $3.1bn. Of those aircraft, 22 were recovered, as were three engines, that were outside Russia.
The Schiphol-based unit of Volga-Dnepr recorded revenue of $2.34bn in 2020 and a profit after tax of $604m, latest accounts show.
Its directors and officials include Konstantin Vekshin, who was named chief executive of Volga-Dnepr in January.
He was previously chief commercial officer and before that was involved in the group’s UK operation.
Other directors include Alexey Isaikin, a former Soviet-era colonel who founded the company in 1990 just as the Soviet Union was near collapse. He also holds Cypriot citizenship and remains the owner of the private business.
Lessors were left reeling after the Russian government allowed airlines to take control of leased aircraft that were still in Russia at the time it invaded Ukraine. EU sanctions prohibited lessors from providing services to Russian carriers. However, because many of the aircraft remained in Russia, lessors were unable to repossess them.
That’s prompted a wave of legal actions and claims by lessors as they attempt to mitigate the financial damage from the seizures.
Celestial units in the action against UniCredit were informed by the bank in March that it was unable to make payments due under the letters of credit because of sanctions. AerCap has disputed that.
AerCap has also launched a $3.5bn insurance claim in relation to its jets that were seized in Russia.
Mr Kelly told analysts this week that “the reality is, all these aircraft are gone”, as far as the lessor is concerned.