Air Lease says Russia’s leased jet law could help claim insurance.

A new Russian law on aircraft leasing has shown that Moscow can “confiscate” planes and such a move could help it claim insurance, Air Lease Corp said at a time when leasing companies risk writing off aircraft. stranded jets in the sanctions-hit country.

“It (the law) helps the issue of insurance because it demonstrates an intent to confiscate, which I think is an essential aspect of our war risk insurance,” Air Canada’s chairman said on Wednesday. Lease, Steven Udvar-Hzy.

The new law allows Russian airlines to place aircraft leased from foreign companies on the country’s aircraft registry and has sparked fears of mass airliner failure.

Global leasing companies have scrambled to repossess more than 400 jets worth nearly $10 billion from Russian airlines, which have generally failed to respond to requests to return the jets.

This raised the possibility of a protracted dispute between lenders and insurers, who could have paid out billions of dollars.

The law prompted AerCap Holdings NV, the world’s largest aircraft leasing company, to notify insurers of a potential $1 billion loss, according to a report by The Insurer.(https://bit.ly/3MWfAJK )

AerCap declined to comment. It is due to publish its fourth quarter results on March 30.

Russia said the law aims “to ensure the uninterrupted operation of activities in the field of civil aviation.”

Air Lease Chief Financial Officer Gregory Willis also raised the possibility of the US and European Union (EU) governments stepping in to support the leasing industry if insurance payments become an issue.

“I can very easily see the government stepping in at some point, as it has,” Willis said during a presentation at the JP Morgan Industrials Conference.

Helane Becker, an analyst at Cowen, said she did not believe the US or EU would step in to provide support.

“The major Western donors exposed to Russia should be able to manage the situation without the support of the government”, declared Mrs Becker.

Shares of Air Lease closed up 3.7% after allaying fears over its exposure to Russia, as all of its planes are contracted to private carriers in Russia who prefer to continue doing business with Western companies.

The company also has “very strong security deposits” on leased planes, Mr Udvar-Hzy said.

Air Lease, of which less than 5% of its net book value fleet is leased to customers in Ukraine and Russia, said it was making “good progress” in reducing its exposure to Russia.

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