Dublin, Ireland — SMBC Aviation Capital, the world’s third-largest aircraft leasing company, has announced a substantial increase in recoveries related to aircraft stranded in Russia due to geopolitical sanctions. In its recently published full-year financial results, the company revealed that it has secured a further $654 million over the past year in insurance settlements, pushing total proceeds from related claims to an impressive $1.41 billion.

This development marks a significant milestone in SMBC’s financial recovery strategy after Western sanctions — imposed in response to Russia’s invasion of Ukraine — forced aircraft lessors to terminate contracts with Russian airlines. SMBC, headquartered in Dublin and owned by a Japanese consortium including Sumitomo Corporation and Sumitomo Mitsui Financial Group, was among several global lessors caught in the crossfire.

Background: Sanctions and Stalled Jets

In 2022, SMBC recorded a $1.6 billion impairment — a proactive financial move to absorb the full expected loss from 34 aircraft that became effectively stranded within Russian territory. These jets, originally leased to Russian carriers, became inaccessible to foreign lessors due to the European Union’s sanctions, which banned the export of aircraft and parts to Russia and terminated leasing contracts.

While the jets remained under the control of Russian airlines, lessors turned to their contingent insurance coverage, often referred to as “war risk” or “confiscation insurance,” to recoup their financial losses.

SMBC was one of six major lessors that had initiated legal proceedings in the Irish courts against their insurers. However, the legal battle concluded last month when the plaintiffs withdrew the case following a series of successful settlements, paving the way for significant cash inflows to the affected firms.

Record-Setting Profits and Stable Core Operations

Outside of insurance recoveries, SMBC’s core business has remained resilient. For the fiscal year ending March 2025, the company reported a 22% year-over-year increase in pre-tax profits, reaching a record $563 million — and that figure excludes the benefit of the insurance settlements.

According to the report, core lease rental revenue rose modestly by 3%, totaling $2 billion. Additionally, SMBC capitalized on strong demand for used aircraft by executing asset sales totaling $1.9 billion, which included the sale of 48 older aircraft. This strategic move not only optimized the company’s portfolio but also injected fresh liquidity into its balance sheet.

Industry-Wide Implications and the Path Ahead

SMBC’s financial recovery is emblematic of a broader trend among aircraft lessors impacted by the war in Ukraine. Several peers, including AerCap and Avolon, have also been pursuing settlements with insurers, reflecting a growing acceptance among industry stakeholders that reclaiming physical aircraft from Russia may be unattainable.

While the loss of aircraft remains a significant blow, the ability to recover funds through insurance has mitigated long-term damage. The precedent set by SMBC and others may also influence how future lease contracts and insurance policies are drafted — with a stronger emphasis on geopolitical risk clauses.

Looking ahead, SMBC appears well-positioned to continue growing in a recovering aviation market. With increased profitability, a more streamlined fleet, and a major portion of Russian-related losses now covered, the company has demonstrated not just resilience, but also a sharp ability to navigate extraordinary challenges.

Conclusion

The $1.41 billion in insurance proceeds stands as both a recovery and a vindication of risk management strategies employed by SMBC Aviation Capital. While the jets may remain grounded in Russia, the company’s financial results show that its global ambitions are still very much in flight.