AerCap Wins Mega Claim Against War Risk Insurers

LONDON—AerCap has won its claim against its insurers for the loss of 116 aircraft and 23 engines leased to Russian airlines and not returned following the invasion of Ukraine in 2022.

The claim was heard alongside those of five other lessors, but with AerCap acting as the lead claimant given the much larger size of its claim, during a 12-week trial that presiding judge Justice Butcher described as “an unusually demanding piece of litigation.”

Including the other lessors, the trial at London’s Commercial Court covered almost 150 aircraft and certain engines.

The judge ruled that the aircraft were lost on March 10, 2022; that Russia’s seizure of the aircraft fell within the war risks cover of the claimants; and that in most cases, the claimants could recover under the “Contingent Cover” of their policies.

However, the judge ruled that the claimants could not claim under the “Possessed Cover” of their policies, meaning that the loss of the aircraft did not fall under the all-risks section of their policies.

AerCap had claimed more than $2 billion under its all-risks policy. In a June 11 statement, the lessor said it had been awarded approximately $1 billion under the “War and Allied Perils” coverage of its policies which were to be paid out by its insurers before July 2.

This is in addition to substantial recoveries that the world’s largest lessor has already made regarding many aircraft involved in the London trial.

In January, for example, AerCap confirmed cash proceeds of $572 million in the full settlement of its insurance claims under the respective insurance policies of Ural Airlines and S7 Airlines. These related to 18 aircraft and one spare engine with Ural Airlines, and 29 aircraft and four spare engines with S7.

The judge noted that AerCap’s settlements had reduced its claims by $1.3 billion prior to the trial.

“Today’s judgment underscores the importance of insurance in today’s uncertain world, as well as the need for insurers to accept their responsibilities,” said Alexander Oddy, a partner at Herbert Smith Freehills Kramer, which represented AerCap.