Russian Aircraft Grounded... Aircraft Leasing Companies and Insurers Clash Over Trillions in Insurance Claims

Following the Ukraine war, conflicts between aircraft leasing companies and insurers over trillions of won in insurance claims related to hundreds of foreign aircraft detained in Russia are intensifying.

[Image source=Pixabay]

According to the US daily The Wall Street Journal (WSJ) on the 20th (local time), the number of foreign leasing company-owned aircraft detained in Russia is about 400, worth approximately 1 billion dollars (about 13 trillion won). Two years ago, as part of sanctions against Russia by Western countries including the US and the European Union (EU), aircraft leasing companies were forced to terminate contracts with Russian airlines, but the Russian authorities have not returned the aircraft and have detained them within the country.

At the outbreak of the war, foreign leasing companies had leased over 500 aircraft to Russian airlines. Despite several attempts to recover them, the aircraft have effectively been seized by Russia. The leasing companies filed insurance claims for their losses, but insurers rejected them, arguing that the aircraft were not covered by insurance.

Leasing companies have claimed insurance payments from major Western insurers such as American International Group, Chubb, Swiss Re, as well as local Russian insurers for years, but the insurers refused, stating that 'sufficient measures were not taken to recover the aircraft, and this is effectively a wartime situation, so insurance payouts are not applicable.' Reaching an agreement on the appropriate amount of insurance compensation is also difficult. There is a high possibility that the aircraft have depreciated in value due to prolonged inadequate maintenance.

Last month, the legal representatives of the US aircraft leasing company Carlyle Aviation Partners argued in documents submitted to the US Federal Insurance Office (FIO) that "insurers are delaying to reduce the amount of insurance payouts" and called for "an investigation into their ability to pay insurance claims."

This content was produced with the assistance of AI translation services.