*Domhnall Slattery

AN ENNIS man who is Chief Executive of one of the world’s leading aviation leasing companies has warned of “very significant write-offs” and the possibility of the aircraft leasing sector no longer doing business in Russia.

Sanctions imposed on Russia in the wake of its invasion of Ukraine triggered a global rush among overseas leasing groups to recover more than 500 aircraft, worth an estimated $10bn, that were stuck in the country.

International lessors had until Monday to sever their ties with Russian carriers under the sanctions. Experts had already warned that the prospects of recovering the jets were slim after the Kremlin earlier this month moved to allow foreign jets to be re-registered in Russia.

Irish-owned aircraft leased to Russian airlines are worth more than €3.6bn, according to estimates by aviation consultancy Cirium.

Avolon Chief Executive, Dómhnal Slattery, he said the company has managed to recover four of fourteen jets leased to carriers in Russia, their net exposure on the remaining 10 jets was below €180m. “In the scale of our balance sheet, it is a headache, not a migraine, for Avolon,” he stated.

It was “impossible” to say if the industry would ever recover the aircraft, Dómhnal maintained. He insisted the company was steadfast in their endeavours to get its planes back but noted that a financial hit was inevitable as part of these efforts.

Speaking on RTÉ’s Morning Ireland, the co-founder of the now former Clare People newspaper detailed, “We’ve been relatively lucky in Russia, a very small percentage of our total book was there, nevertheless it was about $400million or 14 aircraft. We have four of the 14 aircraft outside of Russia, which is good, all of the leases are now terminated in line with sanctions, we have made every effort to get the aircraft back, but at this point that has not happened”.

Slattery said that his company’s “hearts, prayers and morals” were with the people of Ukraine. The company would continue to review what could happen next with their risk management team and auditors. The scale of the financial hit would be determined soon, but he was confident that the aircraft were appropriately insured. “Clearly these sanctions had to be addressed, we had to comply with those sanctions, but in many ways I suppose it’s an unintended consequence in our sector of these sanctions for European countries”.

When asked if he thought it would be possible to do business in Russia again in the future, Mr Slattery said: “I think it’ll be very difficult for the aircraft leasing sector in general, and Avolon specifically, to underwrite new business in Russia for a very long period of time – If ever”.

Avolon has announced it had agreed to supply the owner of Turkey’s Freebird Airlines with as many as 100 flying taxis, the last in a $2bn batch Avolon had bought from Vertical Aerospace. The agreement marks a milestone for Avolon which made an early bet on electric taxis, agreeing to purchase 500 electric vertical take-off and landing aircraft from Vertical. Slattery said he had originally thought it would take “two to three years with a fair wind to place the aircraft”. The rapid success, however, showed that “airlines are genuinely taking the decarbonisation objective seriously”.

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If you’re here, you care about County Clare. So do we. Did you rely on us for Covid-19 updates, follow our election coverage, or visit The Clare Echo every week for breaking news and sport? The Clare Echo invests in local journalism and we want to safeguard its future in our county. By becoming a subscriber you are supporting what we do, will receive access to all our premium articles and a better experience, while helping us improve our offering to you. Subscribe to clareecho.ie and get the first six months for just €3 a month (less than 75c per week), and thereafter €8 per month. Cancel anytime, limited time offer. T&Cs Apply. www.clareecho.ie.

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