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Russia Trouble Causes Aircraft Lessors Little Turbulence

Finance companies that buy and lease out airliners have a problem: Planes they own that are collectively worth billions of dollars are trapped in Russia.

Still, the risk of major losses for investors is relatively small, a new Moody's analysis finds.

The airliners, leased to Russian airlines and stuck there since Russia's ties with the West dissolved this year, are only a small portion of global leasing fleets: less than 10%, for the companies Moody's tracks.

Plus, insurance contracts should help the aircraft lessors—companies such as AerCap Holdings and Dubai Aerospace Enterprise—eventually recover some of the value of their lost planes. Claims could reach around $11 billion, per Moody's.

That could take time. But meanwhile, lessors may be able to sell the rights to their insurance claims to other investors. That would help the leasing companies sooner fund purchases of more planes, which they could lease out to other airlines to make up for some of the lost leasing revenue from the Russian airlines.

Other tailwinds are helping minimize the pain from the Russian freeze-out. Coming out of the pandemic, global travel demand is strengthening again. Meanwhile, Airbus and Boeing have been slow to deliver new jetliners, boosting the going rate for the planes in the leasing companies' fleets.

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U.S. Pushes to Keep B-52 Bombers Going as Pressure From China Grows

The U.S. will rely on existing B-52 jets, like this one landing at England’s RAF Fairford station, until the made-over versions debut.

The U.S. is pushing to upgrade its 60-year-old fleet of strategic bombers to keep them flying into the second half of the 21st century in an effort to deter potential adversaries such as China and Russia.

Air Force officials and military experts have said the refresh of the B-52 bomber—a long-range jet built by Boeing Co. that can carry large loads of conventional and nuclear weapons—is crucial to providing an effective deterrent. The B-52 revamp could cost $11.8 billion, according to Pentagon budget documents in the spring.

The challenge for the Air Force and aerospace suppliers is to refresh long-running programs such as the B-52 while newer systems come online. Upgrading older aircraft takes time as the new systems need testing and the changes have to be staggered so that enough jets remain in service.

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Airlines Face a Shortage of New Boeing, Airbus Jets


Carriers try to plan their flight networks as plane makers juggle supply-chain, other constraints

Airlines in need of more pilots and spare parts are increasingly facing another shortage: new jets.

Boeing Co. and Airbus SE are months behind handing over new single-aisle jets often used for U.S. domestic flights or other short-haul trips, constraining carriers’ ability to add flights to meet resurgent demand and plan their schedules, according to company executives and industry officials.

“It makes it really hard for our team to plan,” Southwest Airlines Co. Chairman Gary Kelly said at an aerospace industry event in Washington, D.C., last month.

A Boeing spokeswoman said the company continues to work closely with suppliers to meet its commitments to customers.

In addition to supply problems, Boeing is facing regulatory challenges for its latest two iterations of the 737 MAX. Both face uncertain futures if Boeing can’t win Federal Aviation Administration approval for them by the end of the year. Current federal law would require a cockpit overhaul if the planes aren’t approved in 2022.

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Boeing 737 MAX Makes First Commercial Flight in Chinese Skies Since 2019

 While China’s airlines haven’t resumed using the plane, one of the jetliners operated by a Mongolian airline landed in Guangzhou

A Boeing Co. 737 MAX operated by MIAT Mongolian Airlines landed in China on Monday in what industry experts say is the jet’s first commercial flight in Chinese skies since Beijing grounded the plane in 2019.

The 737 MAX jet flew to China’s southern city of Guangzhou from Ulaanbaatar, according to flight tracker Flightradar24. Chinese regulators gave MIAT permission to fly the 737 MAX into China in August, a spokesman for the Mongolian airline said in an email, adding that the jet had been leased out to another operator until now.

The flight by the non-Chinese carrier comes weeks after China’s air-safety regulators met with Boeing to discuss the 737 MAX in September. China grounded the series in early 2019—the first country to do so—after two deadly accidents in the space of less than six months in other countries. Chinese airlines have yet to resume commercial flights using the plane.

Qi Qi, a Chinese aviation analyst, said that the MIAT Mongolian Airlines flight is the first commercial flight for the 737 MAX in China since the grounding. The flight is another step toward a broad resumption of MAX’s commercial flights in China, he said.

Since late 2020, the 737 MAX has resumed operations in the U.S., Australia and Canada, among other countries. Only a handful, including China, are still grounding the model.

Excerpt from WSJ
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