Go Back  PPRuNe Forums > Flight Deck Forums > Rumours & News
Reload this Page >

Could Leasing Companies be Forced to Write-off 500+ aircraft

Rumours & News Reporting Points that may affect our jobs or lives as professional pilots. Also, items that may be of interest to professional pilots.

Could Leasing Companies be Forced to Write-off 500+ aircraft

Old 11th Mar 2022, 01:22
  #21 (permalink)  
 
Join Date: Jan 2008
Location: Reading, UK
Posts: 13,932
Originally Posted by Denti View Post
Interesting. Apparently China refuses to provide spare parts for leased aircraft in Russia, which makes it that much harder to maintain them in flying shape. Guess they have to scrap a good portion of the fleet for parts
You believe that Russia will start to break up lessors' aircraft ?

The lawyers will have a field day.
DaveReidUK is offline  
Old 11th Mar 2022, 06:35
  #22 (permalink)  
 
Join Date: Mar 2001
Location: I wouldn't know.
Posts: 4,395
Originally Posted by DaveReidUK View Post
You believe that Russia will start to break up lessors' aircraft ?

The lawyers will have a field day.
Of course they will, see the link above. But they will have anyway, as russian airlines are not returning aircraft and documentation to the leasing companies as required by the Cape Town Convention. So they are already in breach of their contracts and that will just get worse. And yes, big law firms are already calculating their bonuses for the minimum of a decade of litigation following this mess.
Denti is offline  
Old 11th Mar 2022, 09:37
  #23 (permalink)  
 
Join Date: Sep 2007
Location: London
Posts: 552
Could someone clarify what has to happen if you have an aircraft without its maintenance records, which has happened several times before. Ultimately would it need a 'D' check (or even a 'D' check +) to make it airworthy?
I've actually seen an advert from an organisation that has repossessed an aircraft asking for the log book. I don't know if they were successful.
Peter47 is offline  
Old 11th Mar 2022, 12:31
  #24 (permalink)  
 
Join Date: Sep 2008
Location: Where it is comfortable...
Age: 58
Posts: 845
Originally Posted by Peter47 View Post
Could someone clarify what has to happen if you have an aircraft without its maintenance records.
The most likely outcome would be aluminium cans. Without records all life limited parts need to be assumed to have zero hours/cycles left, and the cost of re-conditioning and re-certifying all such components are probably akin to buying a new aircraft.
andrasz is offline  
Old 11th Mar 2022, 18:14
  #25 (permalink)  
Pegase Driver
 
Join Date: May 1997
Location: Europe
Age: 72
Posts: 3,123
Originally Posted by andrasz View Post
The most likely outcome would be aluminium cans. Without records all life limited parts need to be assumed to have zero hours/cycles left, and the cost of re-conditioning and re-certifying all such components are probably akin to buying a new aircraft.
I can conform this , in a smaller scale, a few years back the office near a hangar burned in a small airfield and all the Log books and maintenance records of a few gliders and aircraft went up in flames. . . After months of litigation with the local CAA , the aircraft could not be re-registered and were ultimately scrapped.
ATC Watcher is offline  
Old 13th Mar 2022, 05:25
  #26 (permalink)  
 
Join Date: Dec 2017
Location: Yakima
Posts: 178
Here's a really good video from Mentour Now about leased aircraft, Russia, and repossession and consequences. It's worth a watch.
Winemaker is offline  
Old 13th Mar 2022, 06:08
  #27 (permalink)  
 
Join Date: Jan 2008
Location: Hawaii
Age: 75
Posts: 61
Could Leasing Companies be Forced to Write-off 500+ aircraft

Delta Tech Ops did a lot of heavy maintenance for Russian airlines, including engine overhaul.
That came to a screeching halt.
It's going to be hard for them to replace that expert maintenance !

Delta doesn't fly any 787's but they overhaul the engines for airlines that do .

https://deltatechops.com/delta-techo...ngine-service/
hunbet is offline  
Old 13th Mar 2022, 10:19
  #28 (permalink)  
 
Join Date: Mar 2001
Location: I wouldn't know.
Posts: 4,395
Apparently Bermuda has withdrawn the airworthiness certificates from over 700 jets operated by russian entities.

Denti is offline  
Old 13th Mar 2022, 16:20
  #29 (permalink)  
 
Join Date: Jul 2007
Location: Germany
Posts: 948
Reports that they have been deregistered too. I presume they will shortly be sporting Russian registrations with airworthiness certificates and insurance arranged in record time. The legal ramifications are going to be interesting.
lederhosen is offline  
Old 13th Mar 2022, 17:04
  #30 (permalink)  
 
Join Date: Dec 2011
Location: UK
Posts: 886
Originally Posted by lederhosen View Post
Reports that they have been deregistered too. I presume they will shortly be sporting Russian registrations with airworthiness certificates and insurance arranged in record time. The legal ramifications are going to be interesting.
You can’t deregister an aircraft without prior consent from the owner. You can however revoke a CofA at anytime.

And reasons being that the aircraft are registered in Bermuda for tax reasons are not true - can you imagine working with the Russian authority to remove an aircraft in the current circumstances. But of course the “journalist” who broke this story would know that…
Dannyboy39 is offline  
Old 13th Mar 2022, 17:18
  #31 (permalink)  
 
Join Date: Jul 2007
Location: Germany
Posts: 948
The next few days will show how the Russian authorities respond. I would be surprised if they just stop flying. As I said earlier the legal arguments are yet to be heard. By the way can you explain your comment about tax and registration in Bermuda. I did not quite follow what you were saying.
lederhosen is offline  
Old 13th Mar 2022, 17:34
  #32 (permalink)  
 
Join Date: Apr 2010
Location: Hongkong
Posts: 1
The ownership in Bermuda and other offshore registrations is absolutely for tax reasons, though there may well be other ‘corporate’ considerations as well.
HKG253250 is offline  
Old 13th Mar 2022, 19:28
  #33 (permalink)  
 
Join Date: Jan 2004
Location: West Coast Canada
Posts: 4,362
Can China sell Russia their new narrow-bodied jet or is there enough Western technology that sales could be blocked ?
Big Pistons Forever is online now  
Old 13th Mar 2022, 22:52
  #34 (permalink)  
 
Join Date: Dec 2011
Location: UK
Posts: 886
Originally Posted by HKG253250 View Post
The ownership in Bermuda and other offshore registrations is absolutely for tax reasons, though there may well be other ‘corporate’ considerations as well.
But that’s the point - they are not owned in Bermuda, but in Ireland.
Dannyboy39 is offline  
Old 14th Mar 2022, 01:21
  #35 (permalink)  
 
Join Date: May 2006
Location: Timbuktu
Posts: 56
Originally Posted by Big Pistons Forever View Post
Can China sell Russia their new narrow-bodied jet or is there enough Western technology that sales could be blocked ?
I doubt russian operators have the money to afford any new ac r/n or anytime soon.
brak is offline  
Old 14th Mar 2022, 06:33
  #36 (permalink)  
 
Join Date: Jul 2007
Location: Germany
Posts: 948
Dannyboy39 my point was primarily about registration. The original reasons for non registration in Russia included punitive taxes on imported foreign aircraft and leasing companies' concerns about remarketing aircraft that had been operated under Russian rules as well ironically as the very issue which is now top of the list recovering their assets (see Capetown agreement).

Last edited by lederhosen; 14th Mar 2022 at 06:48.
lederhosen is offline  
Old 14th Mar 2022, 11:35
  #37 (permalink)  
Pegase Driver
 
Join Date: May 1997
Location: Europe
Age: 72
Posts: 3,123
Originally Posted by HKG253250 View Post
The ownership in Bermuda and other offshore registrations is absolutely for tax reasons, though there may well be other ‘corporate’ considerations as well.
It is not as Lederhosen explained, , in fact I was told certain leasing companied mandated registration in Bermuda as a precondition to a leasing contract mainly to avoid Russia bureaucratic control. Well it did not help much in the end. .
ATC Watcher is offline  
Old 14th Mar 2022, 11:50
  #38 (permalink)  
 
Join Date: Mar 2001
Location: I wouldn't know.
Posts: 4,395
In the end it is about both issues. Registration of a western build aircraft in russia required an import tax of 25% of the value of that aircraft. Which is quite a big incentive not to do it. On the other hand, lessors wanted non-russian registrations as well, so it was a win-win at that point. Now, since russia basically does not allow the return of leased aircraft there will be apparently not a registration tax anymore when and if those aircraft will be put on the russian registry. In an autocratic state laws are basically meaningless anyway, just whatever the Fuhrer wants is important, nothing else.
Denti is offline  
Old 14th Mar 2022, 14:25
  #39 (permalink)  
 
Join Date: Jul 2007
Location: Germany
Posts: 948
I am always happy to learn something new. But it would be helpful to understand which bit I got wrong ATC Watcher. Denti who is usually pretty reliable has confirmed that there were taxation implications on the import of foreign aircraft. A short google search will back this up up if anybody remains unconvinced.

My second point was that leasing companies preferred foreign registrations for various reasons. One reason (which I may not have explained particularly well) is that the Russian authorities reputation for oversight of maintenance etc. was not the greatest. One of the big risks in leasing is the state of the aircraft when you get it back. I have had some personal experience of airframes that came back from Africa and South America which were in a shocking state. Fixing them was a big hit to the bottom line. The lessors also hoped that having them registered abroad would help if they needed to get them back. Again as Denti has pointed out that has not worked so well. One aircraft was reportedly flown back from Egypt against the wishes of the lessor and allegedly without insurance.

Someone has started a new thread which confirms my original point that I expected the Russians would in any case continue flying these aircraft. My personal view is that the Russians consider themselves to be in a war situation (in this case economic) and therefore anything goes.
lederhosen is offline  
Old 14th Mar 2022, 16:54
  #40 (permalink)  
Pegase Driver
 
Join Date: May 1997
Location: Europe
Age: 72
Posts: 3,123
lederhosen :
But it would be helpful to understand which bit I got wrong ATC Watcher.
Ooops , syntax error , typed too fast. . The comma is missing after "it is not" . I was directly replying to the HKG affirmation that it was absolutely for tax reasons , quoting you as reference... The correct sentence should have read , It is not ( absolutely for that reasons), comma, as lederhosen explained, etc..
You got nothing wrong ,, sorry for the misunderstanding, will better watch my syntax next time!
ATC Watcher is offline  

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information -

Copyright © 2021 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.