Chinese Leasing Companies Face Heavy Losses After Planes Detained in Russia

Since the outbreak of the Russia–Ukraine war in 2022, Chinese aircraft leasing companies have incurred billions of dollars in losses as more than 70 jets leased to Russian airlines remain stranded inside Russia, according to Chinese state media.

A wave of legal developments was set off by a landmark UK High Court ruling in June that favored aircraft lessors. These incidents have reignited concerns about the long-term impact on Chinese lessors and their ability to recoup value from aircraft still trapped in Russia.

Avmax Group Inc., a Chinese-controlled Canadian lessor, secured a $29 million settlement from Liberty-led insurers, its parent company Shanhe Intelligent Equipment Group announced on Aug. 11. After fees, the net amount received was $22.97 million—equivalent to 172.92 percent of Shanhe’s net profit in the previous fiscal year.

In response to sweeping Western sanctions that required global leasing companies to cancel all contracts with Russian carriers and repossess their aircraft, Moscow passed emergency legislation blocking the return of foreign-owned planes. Instead, it moved to re-register the aircraft as Russian assets, setting aside approximately $1.23 billion to buy them.

Among the hardest hit is BOC Aviation, a subsidiary of the Bank of China, which had 17 aircraft seized in Russia. The company wrote down the full value of these assets in 2022, totaling $804 million in impairment losses.

Avolon, the leasing unit of Bohai Leasing, reported in the first quarter of 2022 a loss of $298 million after 10 of its aircraft were trapped in Russia.

China Aircraft Leasing, under China Everbright Bank, disclosed that two of its aircraft remain in Russia and reported $55.8 million in asset impairments in its 2022 financial report.

Other affected Chinese leasing companies include China Development Bank Leasing, ICBC Leasing, and AviaAM Leasing, a joint venture between Henan Civil Aviation Development and Investment Group and a Lithuanian leasing company. While the extent of losses at these companies varies, all have aircraft still grounded in Russia.

Some companies have begun to recover limited compensation through insurance, and others remain locked in legal battles.

Airwork, a New Zealand-based leasing company owned by Zhejiang Rifa Precision Machinery, leased six Boeing 757-200 Freighters to Russian operators. To date, only one has been recovered. The company recorded a $103 million impairment in 2022 and is currently suing insurer QBE in Auckland’s High Court to recover losses on the detained aircraft.

CDB Aviation leased 15 aircraft to Russian airlines, of which only six were returned. The remaining nine resulted in a $336 million impairment. However, the company was among the first to secure partial insurance compensation, receiving $218 million for five of the stranded planes by the end of 2023.

Due to the complex interpretation of “war risk” clauses in insurance contracts, several Chinese lessors—including BOC Aviation, Bohai Leasing, and Zhejiang Rifa Precision Machinery—have turned to litigation in courts across the UK, Ireland, and New Zealand, with proceedings still underway.

According to the Air Transport Research Institute under the China Academy of Civil Aviation Science and Technology, nearly all major Chinese leasing companies—including BOC Leasing, CDB Leasing, ICBC Leasing, Avolon, and AviaAM—have been impacted.

These incidents have sparked a broader shift within the industry, with leasing companies tightening contract terms and reassessing risk exposure across geopolitically sensitive markets.