Aeroflot hopes to complete insurance settlement for 36 planes by July
MOSCOW. June 5 (Interfax) - Aeroflot expects to complete transactions for an insurance settlement on 36 foreign aircraft by July, the Russian airline's CEO, Sergei Aleksandrovsky said in an interview with Kommersant published on Thursday.
"All the commercial terms of the deals have already been agreed. We expect the actual completion of the settlement for these 36 aircraft in the period from May to July, meaning soon," Aleksandrovsky said.
These are the last planes from full-fledged foreign leasing companies in the group's fleet that still have dual registration, he said. After the settlement, the number of cleared airliners will increase to 228 from the current 192.
The settlement will be financed with Aeroflot's own funds and borrowing, including proceeds from a recent bond offering. Aleksandrovsky did not specify the actual cost of these transactions.
"I can say that this is an effective, economically attractive deal for us. The amount is lower than the current price of airplanes on the market and lower than the terms we had in effect," he said.
Aeroflot is also planning insurance settlements on aircraft owned by the former foreign divisions of Russian banks and companies. Although most of them have already been cleared of dual registration, "there is still uncertainty" regarding their operation, Aleksandrovsky said.
"This [need for settlement] is due to considerations of these assets' security, because the [leasing] companies are still located in, let's say, the jurisdictions of unfriendly countries and the outlook for these countries' relations with these companies is unpredictable," he said. The company hopes the terms of these transactions will be comparable to previous agreements.
Aleksandrovsky said last September that Aeroflot was holding negotiations with foreign leasing companies on insurance settlements for all the remaining 133 aircraft that it had not bought out. He said this included 36 planes from Chinese lessors "that will most likely be settled first of all." About 350 billion rubles will be needed to complete insurance settlements on all the remaining planes, he said at the time.
The buyout and transfer of aircraft from foreign registries to the Russian registry allows them to be used on international routes without the risk of being seized due to sanctions.
Aleksandrovsky said in the interview that Aeroflot is not actively discussing opening up completely new international markets, but "there are opportunities for increasing frequency on existing international routes."
He also said the company is "holding discussions" on "international wet leasing," but did not provide any details.
Speaking about maintaining the flight worthiness of Boeing and Airbus airliners amid sanctions, Aleksandrovsky said that Aeroflot can now do all repair work on its own, with the exception of engines. The company AeroTrustTechnics was recently established to develop this competency.
"Essentially, we're talking about a project to build a large plant to repair aircraft engines. This is about 28,000 square meters. Upon reaching full design capacity, up to 70 overhauls of engines of various modifications are expected to be done here per year. This includes CFM [engines] and Russian PD-14 and PD-8 [engines]. The plant at Sheremetyevo will start operating by 2027 and will be fully operational in 2028," Aleksandrovsky said.
