2023 Highlights: Aeroflot Foreign Plane Settlement in Russia

A major theme of 2023 for Russia has been foreign aircraft settlements with lessors, with Aeroflot forming a big part of that.

2023 Highlights: Aeroflot Foreign Plane Settlement in Russia…

It was reported back in September that Aeroflot is going to continue pushing ahead with foreign aircraft insurance settlements, following its previous solution with AerCap.

As per Interfax, it is understood that the Russian carrier will tap into the National Welfare Fund of the country, as well as use the profits of its subsidiary, Pobeda, to do this.

Without further ado, let’s get into it…

Aeroflot & Foreign Aircraft…

2023 Highlights: Aeroflot Foreign Plane Settlement in Russia — Anna Zvereva from Tallinn, Estonia, CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0, via Wikimedia Commons

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Commenting on these settlements for foreign aircraft & insurance claims in Russia was Aeroflot CEO Sergei Aleksandrovsky:

“As part of the settlement, 300 billion rubles will be allocated from the NWF for all [Russian] airlines, but with the condition that airlines will also use their net profit for the settlement.”

“Airline Pobeda earned a net profit of 15 billion rubles [in 2022] that will be completely directed toward the insurance settlement on the group’s planes.”

“In the process of the insurance settlement, we are securing significantly better terms than the ones we had. For us this is an effective endeavour.”

“We have so far concluded a settlement on 18 planes and five engines with AerCap.”

“We are now holding negotiations on another 17 planes and by the end of the year we plan to complete the process on 61 aircraft”.

Under Russian Control…

John Taggart from Claydon Banbury, Oxfordshire, CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0, via Wikimedia Commons

Ultimately, this means that the aircraft owned by Western lessors will be placed under the control of Insurance Company NSK, which will enable Russian ownership.

It also means that the aircraft will be able to be re-registered from the Bermuda registration of VQ to the Russian registration of RA.

Aeroflot states that this re-registering will enable the aircraft not to get seized due to the ongoing sanctions created by the war in Ukraine.

All eyes will be on the Russian carrier to see whether they can get all of those aircraft under Russian control, and it does seem to be working, especially with the international flights announced in recent weeks.