![BOC Aviation says sanctions deadline to end Russian leases is 'unrealistic'](https://i-invdn-com.investing.com/trkd-images/LYNXNPEI291C7_L.jpg)
© Reuters. A BoC Aviation model plane is seen at their office in Singapore in this May 16, 2016 photo illustration. REUTERS/Edgar Su/Illustration
By Jamie Freed
(Reuters) – Aircraft lessor BOC Aviation Ltd believes a deadline giving lessors just over two weeks left to end contracts with Russian carriers due to sanctions over its invasion of Ukraine is “unrealistic”, a senior executive said on Thursday.
“The EU and UK sanctions set, effectively, a deadline of 28 March for termination of aircraft leases, which is frankly an unrealistic timetable for a fleet of approximately 500 aircraft leased into Russia by operating lessors,” Chief Operating Officer David Walton told analysts, according to an earnings call transcript.
However, he added BOC Aviation would comply with the sanctions and was discussing logistics for the recovery of its planes with customers.
Russia published a draft law on Thursday that could prevent its airlines returning leased aircraft, raising the stakes in a showdown with Western finance over $10 billion of jets.
BOC Aviation said its 18 planes leased to Russian airlines had a book value of $935 million and could also be affected by insurance policy cancellations after Russia’s invasion of Ukraine.
“The international aviation insurance markets are progressively cancelling certain elements of insurance policies in relation to aircraft located in Russia or leased to Russian airlines,” the lessor said in its financial results. “This is a complex and rapidly developing situation that we are monitoring closely.”
BOC Aviation, which has 4.8% of its assets by book value leased to Russian airlines, is among the first leasing firms to publicly confirm upheaval in the aviation insurance market.
The resulting flood of claims and potential writedowns could trigger a lengthy contest between lessors and insurers over liability, according to experts.
BOC Aviation Chief Executive Robert Martin said Russian rental payments had been fully up to date as of the end of February. Russia’s domestic aviation market was one of the strongest performers globally during the pandemic.
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