Aircraft lessors most exposed to the Russian market by aircraft managed 2022

After Russia launched a large-scale military invasion of Ukraine on February 24, 2022, the Russian Federation has been hit by harsh economic sanctions put in place by the United States and other Western nations. These sanctions also include the leasing of aircraft. AerCap and SMBC, two of the world's leading aircraft leasing companies, have the largest exposure to the Russian market.

What does this mean for the global aircraft leasing market?

In the airline industry, airlines own only part of their aircraft fleet, the rest can be operated through aircraft leasing contracts. For example, AerCap, the largest aircraft leasing company in the world has over 1,000 aircraft in its fleet as well as the largest number of Russian lessees. Therefore, the leasing ban impacts not only Russian airlines but also AerCap. This Dublin-based firm must take back its aircraft by the end of March 2022 and find new lessees. In the same situation is SMBC Aviation, another Irish aircraft leasing company with over one billion euros in lease revenue.

The sanctions will also impact Russia's aviation sector

The enforced sanctions affect all imports and exports associated with the aviation industry as well. This includes the delivery of aircraft maintenance parts - the lack of which impedes proper aircraft upkeep and safety - and could directly impact the safe operation of Russia's commercial fleet. Boeing has already announced its suspension of operations in Russia and has ceased supplying replacement parts; Airbus has followed suit and will no longer send spare parts to Russia or to support Russian airlines.