AerCap books $2.4bn charge for Russian jet leases

/ 17th May 2022 /

AerCap Holdings, Ireland’s leading aircraft leasing company, has booked a $2,400m charge in its Q1 2022 results relating to Russian leases.

Total write-offs of $3,180m were offset by accounting benefits of $450m and a tax benefit of $340m.

The company explained that in response to the Russian invasion of Ukraine and sanctions imposed by the United States, the European Union, the United Kingdom and other countries, AerCap terminated the leasing of all its aircraft and engines with Russian airlines.

Prior to the Russian invasion, AerCap had 135 aircraft and 14 engines on lease with Russian airlines, which represented c.5% of AerCap’s fleet by net book value.

The company succeeded in removing 22 aircraft and 3 engines outside of Russia, and 113 aircraft and 11 engines remain in Russia.

“During the first quarter of 2022, we recognised a total loss on our assets that remain in Russia and Ukraine and impairment losses on the assets we have recovered from Russian and Ukrainian airlines," the company stated.

AerCap
Russian jet leases — Total write-offs of $3,180m were offset by accounting benefits of $450m and a tax benefit of $340m.

After the write-down, at the end of March 2022 AerCap had total assets of $70 billion and total liabilities of $55 billion.

CEO Aengus Kelly commented: “During the first quarter, we continued to see a broad-based recovery in travel around the world as governments lifted travel restrictions and demand for travel continued to increase. We expect to see demand for travel continue to grow as the recovery progresses.

“During Q1 we ceased all of our leasing activity to Russian airlines and took a charge primarily related to our aircraft and engines that remain in Russia. We have filed insurance claims related to these assets and will vigorously pursue all available remedies to recover our losses,” he added.

Through Q1, Kelly said that AerCap executed 157 transactions, including 102 lease agreements, 25 purchases and 30 sales.

First quarter cashflow from operating activities was $1.3 billion, more than three times higher than the first quarter of 2021. Kelly added that 92% of the new aircraft order book has been placed through 2023.