By Ryan Hewlett

Feb 13 - (The Insurer) - Aircraft lessor Avolon has revealed that it has received an insurance settlement totalling approximately $177mn for aircraft previously on lease to airlines in Russia.

The settlement – valued at $150mn net of tax – was revealed in the Dublin-headquartered firm’s full-year 2024 results on Thursday.

It relates to aircraft leased to domestic Russian airlines that were seized in response to Western sanctions levied against Russia in response to the invasion of Ukraine in February 2022.

Avolon, one of the largest aircraft lessors in the world, confirmed last week that it had settled a long-running lawsuit against its insurer in Ireland’s High Court over planes sized in Russia.

The lessor first sued a group of 14 insurers in November 2022 when it was refused an indemnity after the planes were detained. The trial began last June before Justice Eileen Roberts.

Avolon had earlier disclosed that it had been forced to write down the value of 10 of its aircraft, valued at $304mn, in the first three months of 2022 because the assets were trapped in Russia.

Other lessors involved in the trial include SMBC, BOC Aviation, CDB Aviation, Nordic Aviation Capital and Hermes Aircraft A1264. Dozens of insurers and reinsurers are being sued by the lessors including Lloyd’s, Chubb, AIG and Fidelis.

The claims similarly argue that aircraft leased into Russia are covered by policies against war or theft.

The lessors are collectively seeking a court order that they are entitled to cover under either their contingent all-risks or war-risks policies.

The defendant insurers deny that the policies have been engaged following the invasion of Ukraine. The insurers argue that there has not been a physical loss of the planes under the terms of the policy wordings and say there is a possibility that the aircraft may be recovered.

The case is the largest ever heard in Ireland by number of lawyers, and is being held in a purpose-built court as no courtroom in the country is large enough to accommodate the 180 legal professionals expected to attend each day.

BOC Aviation, which was seeking to recover $804mn that it wrote down in August 2022 relating to 17 aircraft trapped in Russia, has also settled with its insurers in the Irish action.

The Irish group action largely mirrors the “mega trial” currently being heard in London.

This trial began in October 2024 before Justice Christopher Butcher and concerns five cases including those brought by AerCap, Dubai Aerospace Enterprise (DAE), Merx Aviation, KDAC Aviation Finance and DAE subsidiary Falcon 2019.