3 Oct 2023 10:11

Aeroflot agrees with Ireland's SMBC Aviation on transfer of ownership rights to 17 planes

MOSCOW. Oct 3 (Interfax) - Russian flag carrier Aeroflot has reached a settlement with Irish leasing company SMBC Aviation Capital on 17 leased airplanes, a spokesman for the airline told reporters.

One of the airliners is not owned but managed by SMBC, he said.

"The lessor has dropped its claims against Russian parties both on insurance policies issued by Russian insurance companies and on lease contracts with PJSC Aeroflot. The right of ownership to the aircraft has been transferred to NSK Insurance Company LLC, which paid the sum of the settlement," the spokesman said.

SMBC Aviation Capital, in turn, announced on Monday that it has received cash insurance settlement proceeds totalling about $710 million in respect of 17 aircraft previously leased to Aeroflot.

The settlement was "carried out in full compliance with all applicable laws, sanctions and regulations and have been approved by the U.S. Department of Commerce and the U.S. Department of the Treasury," SMBC Aviation Capital said.

Aeroflot CEO Sergei Aleksandrovsky said earlier that the company was in talks with foreign leasing companies on insurance settlements for a total of 61 leased planes. Ultimately, these airliners will become the property of the leasing company specially created in Russia, which will finance their acquisition with money from the National Welfare Fund (NWF), and Aeroflot will make lease payments to this company, he said. This will make it possible to transfer the planes from the foreign registry, allowing them to be used on international flights without risk of seizure due to sanctions.

At the beginning of September, Aeroflot said it had settled relations with Irish leasing company AerCap on 18 aircraft and five spare engines. The ownership rights to them were also transferred to NSK Insurance Company, which was founded at the end of 2022 by Civilian Airport Administration, a state company controlled by Russia's Federal Air Transport Agency. NSK, in turn, controls leasing company NLK Finance LLC, to which Aeroflot earlier transferred 18 Boeing and Airbus airliners purchased from foreign lessors under finance leases, which unlike operating leases were not prohibited by western sanctions.

The Aeroflot Group, which also includes low-cost carrier Pobeda and Rossiya Airlines, had a fleet of 348 planes as of the end of August, according to the company's website.