Russia Seized 400 Foreign-Owned Jets. Then an Epic Insurance Fight Began.
Russia’s seizure of billions of dollars worth of foreign-owned planes has set off the biggest-ever brawl in the normally staid business of aircraft insurance. Some of the world’s biggest insurers are fighting back against claims by the aircraft’s owners. The insurers say the owners should have done more to grab planes before they were seized.
And they are arguing in court filings that the U.S.’s support for Ukraine means that it is, in effect, at war with Russia. That would void some claims. At stake: billions of dollars, more than 400 planes, hundreds of millions in legal costs.
The legal fight, sprawling over two continents and dozens of companies, will likely affect coverage for future conflicts, analysts and lawyers said. The planes, mostly Airbus and Boeing commercial jets leased to both Russian and foreign airlines, were worth more than $10 billion when they were stranded in Russia following its invasion of Ukraine just over two years ago. The planes are owned by a small number of big but mostly no-name aircraft-leasing companies.
They are covered by insurers from both Russia and the West, including giants such as American International Group, Chubb and Swiss Re. Lawyers are still haggling over the most basic questions about who should pay. Is there any chance the jets could be returned to their owners? Were the planes stolen by the Russian airlines or seized by the state? Have the jets been so poorly maintained or so badly damaged that they are worthless? The dispute dates back to the chaotic early days of the war in Ukraine.
The U.S. and Europe put sanctions on Russia, which forced leasing companies to end agreements with Russia’s airlines. Hundreds of aircraft were left in limbo.
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