AerCap sues AIG for $3.5bn over aircraft lost in Russia
AerCap, the world’s largest aircraft lessor, has recently sued AIG and other insurers following a $3.5bn all-risk claim filed in March over aircraft lost in Russia.
The company argued in the UK’s High Court that insurers owed AerCap the amount as part of the “all risk” insurance policy it adopted.
According to the Dublin-based company, all-risk insurers were “in breach of the policy” after they refused to pay the amount, news website Insurance Insider first reported.
The aircraft lessor added that if the all-risk claim resulted unsuccessful, it would still be entitled to a refund under the “war and allied perils” of its insurance policy.
Commenting on the ongoing lawsuit, David Warnock-Smith, professor of aviation management at Buckinghamshire New University, told City PM: “It is understandable that AerCap are pursuing every possible avenue to recoup their losses.
“As Ireland and Russia are not at war then the outcome of the lawsuit will rest on whether the High Court believes the Russia – Ukraine war and related economic sanctions, which AerCap had to comply with, will fall under the insurance company’s all-risk and war policy or not.”
AerCap posted a $2.7bn net loss in the first three months of 2022 after 113 of its jets and 11 engines remained stuck in Russia.
More than 400 foreign-leased planes worth $10bn remain in Russia as the Kremlin ordered carriers to hold aircraft hostage after Western countries sanctioned Moscow following the invasion of Ukraine.
Rival SMBC was forced to write off a $1.1bn loss as 34 of its planes remain in Putin’s hands.
According to industry stakeholders, arguments between insurers and aircraft companies over who pays the bill could lead to year-long legal battles.
Lloyd’s of London in May hired global law firm Clyde & Co to investigate whether insurance claims made by aircraft lessors could be denied, City PM reported.
City PM has approached AerCap, Lloyd’s, and AIG for comment.