Airbus Updates No.3692

 

Aeroflot Buys Eight Airbus A330s Stuck In Russia

Aeroflot, Russia’s biggest airline, has bought eight Airbus A330 aircraft from foreign leasing companies, the carrier said on Friday. According to the Russian operator, it bought these jetliners “as part of the fulfillment of contractual obligations.” Let’s investigate further.

Buying the aircraft

Since the beginning of Russia’s invasion of Ukraine, foreign leasing companies have been heavily impacted after being unable to recover their stranded planes in Russia. More than 400 aircraft leased from Western firms are currently grounded in Russia. The value of these planes is nearly US$10 billion.

On Friday, Aeroflot informed Reuters it had bought eight Airbus A330 aircraft from foreign leasing companies. Nonetheless, it did not specify which firms the planes had been leased from.

As reported by Reuters, the purchase could be a bid to maintain good relations with lessors.

There’s an exemption to European Union sanctions against Russia in respect of aircraft financial leases. This exemption involves purchase when the lease ends.

Looking at Aeroflot’s Airbus A330 fleet

Aeroflot has a fleet of 12 Airbus A330-300, according to data provided by ch-aviation. Eight of these planes are under a financial leasing contract and are owned by Vistavia Ireland DAC and Aviasky Ireland DAC.

A finance lease is where the aircraft is owned by the bank (or its special purpose company), and regular lease payments are made by the airline to the bank until the full amount is paid, and the airline owns or has the option of purchasing, the aircraft.

GECAS owns two additional A330-300s operated by Aeroflot, Goshawk one and AerCap another. The latter is the only one that does not have a Russian registration. Instead, it has a registration from Bermuda, VQ-BMV.

Overall, in Russia, there are 26 Airbus A330-300s, according to ch-aviation. The remaining planes are operated by iFly Airlines (seven) and Nordwind Airlines (seven). They are mostly leased to Western lessors, including GECAS, CDB Aviation, Carlyle Aviation Partners, and more. Nonetheless, iFly Airlines leases two from DAE Capital, a Dubai-based lessor.

The leasing companies are losing billions in assets currently frozen in Russia. To cope with the impact, leasing firms have initiated lengthy insurance claims to try to recover some of the lost value of the aircraft.

AerCap, the world’s biggest aircraft lessor, has submitted the most significant claim, a US$3.5 billion insurance claim for more than 100 jets.

According to Cirium, there were 515 commercial jets and turboprops leased to Russian airlines by non-Russian lessors at the start of the conflict. In late February, 39 of them were already outside of Russia and thus probably no longer on lease in Russia. Additionally, another 41 planes have been repossessed successfully since the conflict began.

Airbus Updates No.3584

 Thai Airways Set To Sell 3 Airbus A330s And A Flight Simulator

As part of its ongoing restructuring efforts, Thai Airways has put three more widebody airplanes along with a flight simulator up for sale. The three Airbus A330 aircraft join a long list of widebodies that the carrier has already decided to get rid of as it looks to restructure its fleet following the pandemic.

Thai Airways has added three of its A330s to the list of airplanes it wants to sell. Photo: Getty Images

And now the A330s

Like most airlines around the world, Thai Airways plans to rely more on modern fuel-efficient twin-engine airplanes. While the airline had already put several widebody airplanes up for sale late last year, its A330s were not part of the initial list.

Then, last month it was reported that three of its A330s have also fallen prey to the carrier’s restructuring plans. Thai has also added a flight simulator to the list of equipment it no longer needs.

According to a report by AeroTime Hub, of the carrier’s 15 A330s, the following three have been made redundant:

1. HS-TEN
2. HS-TEO
3. HS-TEP

All three airplanes have an average age of around 12.5 years.

The list is long

As reported earlier, Thai Airways put 34 airplanes up for sale late last year, of which 32 were widebodies. The list included 12 of its older 777s, nine A340s, two 737s, one A300, and all 10 of its remaining 747-400s.

Thai Airways dropping its 747s came as no surprise as the fuel-guzzling quadjet is out of favor with most airlines worldwide. However, it will be slightly tricky to find a new owner for these, especially for a passenger version. The Queens are just no longer financially viable, with other more competitive twin jets in the market. Cargo airlines could be potential customers for the jumbos if they are willing to bear the costs of reconfiguration and conversion. However, with airlines tightening their purse strings in a post-pandemic world, this too looks tricky.

The carrier’s A380s have also not remained immune to the pandemic. As reported earlier this year, the airline was testing the market to see if there were any takers for two of its six superjumbos.

Restructuring to stay afloat

Thai Airways has been losing money since before the pandemic. In 2019, the Asian carrier reported a loss of 12.2 billion Baht ($385 million). The forces of pandemic-induced shutdowns were so immense that by May 2020, the airline had to file for bankruptcy protection due to massive debts of more than $9.8 billion.

Over the last few months, the carrier has been making strategic efforts to cut losses to stay afloat. Selling off its old airplanes is part of the larger restructuring plan that Thai has been pursuing aggressively for a while now. Unfortunately, staff lay-offs also feature in the carrier’s long-term rehabilitation plan, possibly reducing up to half of the total workforce in the next four years.

The airline has also found non-traditional ways of generating much-needed cash in recent months. From renting out, and now even selling, its flight simulators to introducing its signature dishes in supermarkets and stores, the carrier collected $48.4 million in the first half of 2021 as non-ticket revenues.

While things are far from perfect for Thai Airways, it continues to crawl to remain in business. In June this year, the carrier’s rehabilitation plan was approved by Bangkok’s Central Bankruptcy Court. The airline has even managed to clear payments of $37.5 million to creditors within the deadline as instructed by the courts. Still, it seems Thai Airways has a long way to go to see any semblance of normality.