KBRA releases commentary discussing further developments in the aviation market, particularly in regard to future prospects for the non-Russian owned aircraft currently on lease to Russian operators. While a handful of aircraft had been recovered in the early days of the invasion, which has entered its third week, Russian authorities have since blocked aircraft from leaving its airspace, making it almost impossible for aircraft lessors to repossess their aircraft as the war continues and Russia’s global isolation grows.

KBRA continues to monitor events as they unfold and measure the impact of potential impairments on the equity and cash flow metrics of our rated lessors. Global lessors hold maintenance reserves and security deposits on aircraft leased in Russia, which should help alleviate some of the initial pain from potential missed rent payments. However, at this time, recovery prospects for the aircraft are unclear, and the level of potential impairments and their timing are difficult to gauge. We are closely monitoring further developments in Russia and are frequently speaking to aircraft leasing companies as they navigate the complexities of recovering their aircraft or seeking compensation for them via insurance or other sources such as government resources.

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About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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