Flight equipment subject to operating lease

12 Months Ended

Dec. 31, 2023

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, 2023:


	(in thousands)
Net book value as of December 31, 2022	$	24,538,385
Purchase of aircraft	4,657,133
Depreciation	(1,068,772)
Sale of aircraft	(1,290,434)
Flight equipment held for sale	(605,104)
Net book value as of December 31, 2023	$	26,231,208

Accumulated depreciation as of December 31, 2023	(5,556,033)

Update on 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, including eight aircraft from its managed fleet. While the Company or the respective managed platform maintains title to the aircraft, the Company determined that it is unlikely it or they 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 October 2022, one Boeing 737-8 MAX aircraft previously detained in Russia was returned to the Company. At this time, the Company does not anticipate the return of any other aircraft detained in Russia.

On December 21, 2023, the Company received cash insurance settlement proceeds in settlement of its insurance claims under JSC Siberia Airline’s (“S7”, a Russian airline) insurance policies in respect of three A320-200 and one A321-200 aircraft in the Company’s owned fleet on lease to S7 at the time of Russia’s invasion of Ukraine in February 2022. The Company also had five A321-200neo aircraft previously on lease to S7 that were not included in the insurance settlement. During the three months ended December 31, 2023, the Company recognized a net benefit of approximately $64.7 million received from a partial settlement of insurance claims under S7 insurance policies related to four aircraft in our owned fleet.

The Company is in ongoing settlement discussions regarding aircraft previously leased to Russian airlines. However, it is uncertain whether any of these discussions will result in any settlement or receipt of settlement proceeds and, if so, in what amount.

As previously disclosed in the Company’s filings with the U.S. Securities and Exchange Commission, in June 2022, the Company and certain of its subsidiaries submitted insurance claims to the insurers on its aviation insurance policies to recover losses relating to aircraft detained in Russia for which the Company recorded a net write-off of its interests in its owned and managed aircraft totaling approximately $771.5 million for the year ended December 31, 2022. In December 2022, the Company filed suit in the Los Angeles County Superior Court of the State of California against its aviation insurance carriers in connection with its previously submitted insurance claims. The receipt of these insurance settlement proceeds serve to mitigate, in part, the Company’s losses under its aviation insurance policies. The Company continues to have significant claims against its aviation insurance carriers and will continue to vigorously pursue all available insurance claims and its related insurance litigation, and all rights and remedies therein. Collection, timing and amounts of any future insurance and related recoveries and the outcome of the Company’s ongoing insurance litigation remain uncertain at this time.

As of February 15, 2024, 16 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.