Chinese leasing firms incur huge losses after aircraft detained in Russia
Chinese cargo exports have also been seized under Moscow’s ban on goods that could aid Ukraine’s war effort
Chinese aircraft leasing companies have emerged as the latest victims of the prolonged Ukraine war, after one firm disclosed it had received US$23 million in insurance payouts for three planes detained in Russia and never returned – part of a wave of Chinese assets held in the country in recent years.
AVMAX, which is a wholly-owned subsidiary of Guangdong-based Shanhe Intelligent, had leased the aircraft to Russian clients under three contracts, according to a stock exchange filing released this week.
The planes were turboprop-powered airliners developed by De Havilland Canada – a subsidiary of Canadian airline manufacturer Bombardier – and leased to Russian airliners Yakutia Airlines and Aurora JSC, according to the announcement. Two of the contracts had already expired last year.
AVMAX’s situation is not an isolated case. A Zhejiang-based company’s wholly owned subsidiary, Airwork, also had six Boeing 757 freighter aircraft detained in Russia after it demanded the termination of leasing contracts and the return of its planes in 2022.
Airwork incurred losses totalling hundreds of millions of dollars after recovering just one aircraft. This forced the company to write off the value of the remaining assets and pursue protracted insurance litigation.
A few other Chinese leasing firms – including Bank of China Aviation and China Development Bank Financial Leasing – have also reported huge losses and received insurance compensation after being unable to recover some of their planes in Russia since 2022, according to public filings.
Such disputes have not been confined to aviation.