Irish aircraft leasing firm leads business exodus from Russia 

Western firms are leaving Vladimir Putin's Russia in their droves.

Irish-based aircraft leasing firm AerCap Holdings is part of a growing exodus of Western businesses from Russia as sanctions tighten against the country over its invasion of Ukraine.

AerCap — which is headquartered in Dublin and has its shares listed in New York – has more than 150 planes in Russia, but said it will comply with the measures imposed by the EU, US, and others against Moscow.

Six of the largest aircraft lessors have around 300 planes in Russia.

They said they will stop trading with Russian airlines and seek the return of hundreds of jets amid growing sanctions, with the move jeopardising flights at Russian carriers, including Aeroflot.

“AerCap intends to fully comply with all applicable sanctions, which will require us to cease our leasing activity with Russian airlines,” the Dublin-based group said, without commenting on whether it will seek to seize back the planes.

AerCap’s shares fell as much as 13% in early trading in New York. About 5% of its plane portfolio is affected, with a market value approaching $2.5bn (€2.2bn).

More than half of the active commercial fleet in Russia is leased, mostly from companies based abroad. AerCap has 96 planes with Aeroflot and 17 at its discount arm Pobeda.

EU sanctions announced on Sunday ban the supply of “all goods and technology” linked to aircraft, giving leasing firms the challenge of terminating contracts and recalling planes as the war continues to rage.

Russia hit back at the measures and widespread airspace closures to its jets by banning airlines from the EU and a host of other countries from its own skies.

AviaAM Leasing China has requested that Russian carriers ground and return 13 planes.

After AerCap, SMBC Aviation Capital, the Dublin-based leasing arm of Japan’s Sumitomo Mitsui Financial Group, ranks next by value among foreign lessors, with Singapore-based BOC Aviation and Air Lease Corp of Los Angeles holding smaller positions.

Efforts to take back aircraft could be made easier by the fact that a large number of Russian jets are registered elsewhere, something that lessors can insist on when there are concerns about their ability to recover them.

The overall corporate exodus is also understood to include the likes of HSBC bank, FedEx, UPS, and Norwegian oil firm Equinor.

Meanwhile, BP shares fell by more than 7% as investors weighed the cost of its decision to exit Russia against the reputational benefits of ending the controversial alliance with oil giant Rosneft.

BP warned that it could take a write-down of as much as $25bn as a result of quitting Russia.

Several analysts predicted a financial hit on that scale was the most likely outcome, as economic sanctions imposed by the West make it hard to find a buyer.

Additional reporting Bloomberg