Insurers including AIG and Lloyd’s of London are facing a potential $3.5bn loss under a test case brought by aircraft leasing companies that saw their planes and engines retained by Russian airlines after the country’s invasion of Ukraine.
The aircraft leasing companies claim the insurers have failed to reimburse them for the multi-billion dollar losses suffered after the Russian companies refused to return the aviation assets despite their leases being terminated.
At least two civil aviation authorities, in Ireland and Bermuda have since revoked the aircraft’s Certificates of Airworthiness, which alongside the lack of authorised maintenance could render the aircraft and engines worthless.
Most, if not all, of the aircrafts have been registered in Russia. The claimants, led by Aercap Ireland Limited, allege they “…have sustained physical loss of the aircraft and engines by (wrongful) deprivation of physical possession by the lessees… in circumstances where their recovery is uncertain and / or unlikely”.
The total value of the aircraft and engines insured by the policy number UMR B1752GE2100325000 is $3,478,958,856. Despite submitting a claim under the policy, the insureds allege they have been paid out in part or in full. The defendants, AIG Europe S.A. and Lloyds Insurance Company S.A. have yet to file their defences to the claim.
