Companies That Leased Planes to Russia May Lose Them

Even before Vladimir Putin changed the law to block them, Western companies that own aircraft leased to Russian airlines were coming to the conclusion that they've seen the last of those planes. More than 500 foreign-owned planes are in Russia, worth as much as $12 billion, experts told the New York Times. The owners' dilemma over the planes was discussed at a conference in San Diego, where the consensus was: "That’s it, we will not be able to recover them," said Vitaly Guzhva, a professor at Embry-Riddle Aeronautical University.

The owners face a March 28 deadline, before European sanctions kick in, to cancel contracts and get their planes back from Russia. BOC Aviation, which has 18 planes leased to Russian carriers, said that's not enough time. And Russia just threw up a roadblock by enacting a law to permit the registration of foreign aircraft in Russia, per the BBC, to "ensure the uninterrupted functioning" of civil aviation. The law could keep the certification of safety in Russia, too, making the planes available for domestic flights. Putin also has raised the possibility of nationalizing the assets of foreign companies.

Most Russian carriers have dropped their international routes, so planes can't be confiscated when they land in other countries. A few planes may have been grabbed already, but maintenance records often are in the possession of the airlines. "Unless you have those records, the aircraft is virtually worthless," a consultant said. An Indiana firm that handles aircraft repossessions has been contacted by owners but is stumped. "We won't accept an assignment that we're not sure we can do," Nick Popovich said. "I'm still doing research on what we can and can’t do legally." (More airline industry stories.)