Aviation industry faces crisis over 400 seized aircraft in Russia

A massive legal and financial dispute continues to impact the global aviation industry following the seizure of over 400 passenger aircraft in Russia. The seizure occurred after Moscow authorized domestic airlines to retain and re-register aircraft leased from Western giants such as AerCap and SMBC Aviation Capital in response to international sanctions.

Following a historic ruling by the London High Court in favor of global leasing companies, compensation payments exceeding eight billion dollars are being finalized. Because the physical return of the fleet—valued at tens of billions of dollars—has proven impossible, aircraft owners have activated extensive insurance policies.

This legal battle has transformed the insurance landscape. Major insurers, including Lloyd’s of London, initially resisted payouts by arguing that seizures under international sanctions were not covered by standard war risk policies. The resulting massive losses for insurers and reinsurers have led to a drastic increase in insurance premiums for airlines worldwide. These rising operational costs are being passed on to consumers, contributing to record-high global airfares.