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Dubai leasing co writes off $538 mln due to aircraft remaining in Russia

MOSCOW. May 6 (Interfax) – Dubai Aerospace Enterprise has reported a net write-off of aircraft with airlines in Russia and no longer in the company’s control following the imposition of western sanctions of $537.9 million.

"We proactively addressed the loss of control of our aircraft on lease to airlines in Russia by writing off our net investment. We have filed claims of $1 billion under certain insurance policies and expect to file additional claims to recover amounts due to us," DAE said in a statement, quoting its CEO, Firoz Tarapore.

DAE did not say how many planes were "stuck" in Russia or who had leased them. DAE signed an agreement in 2019 to supply three Boeing 777 to the Volga-Dnepr group’s AirBridgeCargo.

Irish leasing company Avolon said earlier this month that it had recognized an impairment of $304 million in respect of its exposure to Russia, reducing the carrying value of 10 owned aircraft to zero. Its Russian customers include the Pobeda airline.

Air Lease Corporation recorded a write-off of interests in 21 owned and six managed aircraft that remain in Russia totaling approximately $802.4 million but said it was "vigorously pursuing insurance claims to recover losses relating to these aircraft." The IBA analytical agency estimates 34 ALC airlines were being operated in Russia prior to the sanctions. Its customers were Ural Airlines, S7, Nordwind and IFly.

Several Western countries at the end of February imposed sanctions on Russia over the military operation in Ukraine, and some of them hit the aviation sector. They include a ban on the supply of civil aircraft and spare parts to Russia, and the provision of services for their maintenance and insurance. Aircraft already in operation in the country must, according to the sanctions, be returned to foreign leasing companies.

Most airlines have been notified that "sanctioned aircraft" are being recalled but have continued to operate them. Russia will keep most of its Boeing and Airbus aircraft despite the Western sanctions against its aviation industry, Deputy Prime Minister Yury Borisov said on March 31.