Difficult to do business in Russia again - Avolon CEO

Dómhnal Slattery, the chief executive of Dublin-based aviation leasing company Avolon, said he believes it will be very difficult for the aircraft leasing sector in general to underwrite new business in Russia for a very long period of time - if ever.

Mr Slattery also said there was "an inevitability of a financial hit" from its business in Russia, as the company struggles to reclaim 10 of its planes from the country.

Avolon had leased 14 planes to Russian airlines but those agreements have now been cancelled in line with international sanctions on the country.

Four of the planes were in other countries at the time the sanctions were imposed, but the leasing company has not been able to get the remaining jets back.

"We've been relatively lucky in Russia, a very small percentage of our total book was there, nevertheless it was about $400m or 14 aircraft," Dómhnal Slattery said.

"We have four of the 14 aircraft outside of Russia, which is good, all of the leases are now terminated in line with sanctions, we have made every effort to get the aircraft back, but at this point that has not happened," the Avolon CEO said on RTÉ's Morning Ireland.

Mr Slattery said the company is currently reviewing what would happen next but it was likely that some cost would have to be incurred by the business.

He said the scale of that hit would be determined soon, but he believed their aircraft was appropriately insured.

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"Clearly these sanctions had to be addressed, we had to comply with those sanctions but in many ways I suppose it's an unintended consequence in our sector of these sanctions for European countries," he said.

Asked if he thought it would be possible to do business in Russia again in the future, given their difficulty in getting their planes back, Mr Slattery said: "I think it'll be very difficult for the aircraft leasing sector in general, and Avolon specifically, to underwrite new business in Russia for a very long period of time - if ever."

Avolon fills orderbook for its 500 electric planes

Earlier Avolon said it had agreed leasing deals for all 500 of the small electrical aircraft it has agreed to purchase from New York-listed Vertical Aerospace.

Turkey's Gozen Holdings has placed an order for 50 of the aircraft, with an option to purchase or lease 50 more in the future.

This follows previous orders from Japan Airlines, Air Asia and Air Greenland.

Vertical Aerospace's VX4 can take-off and land vertically, and is capable of carrying four passengers up to 160km.

The Irish aircraft leasing firm placed an order for 500 of its vehicles just nine months ago, with commercial services not likely to begin until 2024 at the earliest.

It has now secured agreements with airlines and aviation companies to lease all of these aircraft, with its orderbook oversubscribed by 50 options.

"Every airline in the world is on a path to decarbonise, and it's a clear and stated goal of the global aviation industry, and these aircraft are zero emissions from an operational perspective," Dómhnal Slattery said on RTÉ's Morning Ireland.

"It's the first step, a baby step, in the right direction of decarbonisation, so I think that's the first reason some of these global airlines have embraced this new technology."

He said he expected the aircraft to improve in the coming years, with higher seating capacities and longer range.

At the same time he expected other technology, like hydrogen-powered planes, to start to come on-stream to help airlines reduce their emissions.

With its high speed, low running costs and ability to operate in confined locations, Vertical's VX4 is seen as an alternative to helicopter travel.

"With over 15 million people living in Istanbul, the city is consistently faced with congestion which hinders both the cities' development and attractiveness as a tourist and business location," said Mekin Gözen, CEO of Gözen Holding. "We strongly believe that the deployment of the VX4 will dramatically reshape Istanbul and the rest of Turkey.

"Our partnership with Avolon will see us create an eVTOL ecosystem in the country and is the first step in delivering sustainable air travel to the region, position it as a global leader."

As well as buying aircraft from the firm, Avolon is also an investor in Vertical - alongside Microsoft, Rolls-Royce, Honeywell, and American Airlines.

Mr Slattery said the next step was getting the aircraft to market, but he anticipated Avolon would ultimately go beyond the 500 planes it currently owns.

"We were the launch customer for the aircraft less than nine months ago, the demand is, by any metric, off the charts, so the primary goal now by any perspective is to ensure the aircraft gets designed, built and certified, which is well on its way," he said.

"I suspect Avolon will continue to be a major supporter of this aircraft type given the demand we're seeing globally," he added.

At the same time he expected other technology, like hydrogen-powered planes, to start to come on-stream to help airlines reduce their emissions.

With its high speed, low running costs and ability to operate in confined locations, Vertical's VX4 is seen as an alternative to helicopter travel.

"With over 15 million people living in Istanbul, the city is consistently faced with congestion which hinders both the cities' development and attractiveness as a tourist and business location," said Mekin Gözen, CEO of Gözen Holding.

"We strongly believe that the deployment of the VX4 will dramatically reshape Istanbul and the rest of Turkey," he said.

"Our partnership with Avolon will see us create an eVTOL ecosystem in the country and is the first step in delivering sustainable air travel to the region, position it as a global leader," he added.