Sanctions on Russia prompt concern for Irish aircraft-lessors

Concern is growing in the aircraft-leasing industry over the impact of sanctions on hundreds of aircraft owned by Irish companies, operating in Russia.

Sources in the industry said on Sunday that major Dublin-headquartered firms were setting up dedicated teams to assess the impact of sanctions – and examine ways of getting aircraft out of Russia.

“All the lessors have taskforces established within their own businesses, and a lot of them will be trying to get aircraft out of Russia and take them back – because they’ll be grounded for who knows how long,” one figure in the sector said.

The aircraft look set to be impacted by sanctions announced by the European Union which prohibit the supply of "goods and technology suited for use in aviation".

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Hundreds of planes are leased by Irish companies such as Aercap, which has 149 leased to Russian airlines and Dublin-headquartered SMBC Aviation Capital, which has 34 jets leased in the country, according to trade publication Airfinance Journal. The combined worth of the stock runs to the billions.

Business sources said there were concerns, however, that Russia would refuse to relinquish the planes, prompting a cascade of insurance claims, or tussles over the fate of aircraft. A senior political source also said this was a possibility. The issue would be particularly vexed if the jets flew only on Russian domestic routes, with repossession of contested assets seen as easier when they land overseas.

A second Government source said the Department of Foreign Affairs and the Department of Transport were in contact with the European Commission and there would be further details on how the sanctions will apply this week.