Flight equipment subject to operating lease

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Flight equipment subject to operating lease

The following table summarizes the activities for the Company’s flight equipment subject to operating lease for the year ended December 31, 2022:


	(in thousands)
Net book value as of December 31, 2021	$	22,899,004
Purchase of aircraft	3,827,407
Depreciation	(965,955)
Sale of aircraft and transfers to net investments in sales-type leases	(461,931)
Write-off of Russian fleet, net of recoveries	(760,140)
Net book value as of December 31, 2022	$	24,538,385

Accumulated depreciation as of December 31, 2022	(4,928,503)

Write-off of Russian fleet

In response to the sanctions against certain industry sectors and parties in Russia, in March 2022, the Company terminated all of its leasing activities in Russia. While the Company maintains title to the aircraft, the Company determined that it is unlikely it will regain possession of the aircraft detained in Russia. As such, during the three months ended March 31, 2022, the Company recognized a loss from asset write-offs of its interests in owned aircraft detained in Russia, totaling approximately $791.0 million.

In June 2022, the Company submitted insurance claims to its insurers to recover its losses relating to aircraft detained in Russia. In December 2022, the Company filed suit in the Los Angeles County Superior Court of the State of California against its insurers in connection with its previously submitted insurance claims and will continue to vigorously pursue all available insurance claims. Collection, timing and amounts of any insurance recoveries and the outcome of the ongoing insurance litigation remain uncertain at this time.

In October 2022, one Boeing 737-8 MAX aircraft that was not operating and had been in storage in Russia since the 737 MAX grounding was returned to the Company. As a result, in the fourth quarter of 2022, the Company added the aircraft back to its owned fleet, recording the aircraft at fair value to Flight equipment subject to operating lease in the Company’s Consolidated Balance Sheet with a corresponding offset to the write-off line item in the Company’s Statement of Operations of $30.9 million. At this time, the Company does not anticipate the return of any other aircraft detained in Russia.

As of February 16, 2023, 20 aircraft previously included in the Company’s owned fleet are still detained in Russia. The operators of these aircraft have continued to fly most of the aircraft notwithstanding the termination of leasing activities and the Company’s ongoing demands for the return of its assets.