DAE Capital, based in Dubai, has announced a significant development in its operations. The aircraft leasing company has secured a substantial insurance settlement of around USD 118 million. This amount pertains to the aircraft it had previously leased to Aeroflot, the flagship carrier of Russia.
The settlement revolves around insurance claims linked to “seven aircraft and associated engines” under the insurance and reinsurance policies of Aeroflot. Ensuring adherence to all applicable sanction regimes, the funds were received from NSK, a Russian state-owned insurer. Consequently, this marks the end of DAE’s claims against NSK, Aeroflot, and their international reinsurers concerning these aircraft and engines.
Background and Context
The genesis of this settlement lies in the events following the Russia-Ukraine conflict beginning in February 2022. Post the imposition of international sanctions on Russia, DAE, along with other aircraft lessors, terminated contracts with Russian airlines. This was primarily in response to Russia’s action of barring about 400 foreign-owned aircraft from leaving its airspace. Additionally, DAE registered a significant write-off, as reported by Reuters, amounting to USD 538 million due to aircraft stranded in Russia.
This settlement aligns with similar agreements previously made between Aeroflot and other aircraft leasing companies, including AerCap, SMBC Aviation Capital, CDB Aviation, and BOC Aviation. DAE Capital has also indicated that negotiations are in progress for potential settlements with other Russian airlines. However, these talks’ outcomes remain uncertain in terms of both potential settlements and their amounts. DAE emphasized the unpredictability in securing the necessary approvals and funding for any further insurance settlements.
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