Failure To Meet Terms Of 2019 Engine Services Agreement

Flexjet filed a lawsuit against Honeywell in 2023 related to non-fulfillment of a Mechanical Services Agreement the two companies entered into in 2018. Under the MSA, Honeywell was supposed to provide maintenance, repair, and overhaul services on several engine types used by Flexjet aircraft, but even from the beginning had challenges keeping up with the pace of those services.

Honeywell faced parts shortages in 2018 before covid ever came on the scene, as it issued a service bulletin on defective bearings that created component shortages and delays of engine rebuilds on Flexjet aircraft.

In addition to parts and component shortages, there was a lack of recruiting for next-generation skilled workers as well as a constant barrage of negative media coverage regarding private aviation.

In early 2023, about 60 percent of Flexjet’s 271 aircraft – about 160 aircraft – were equipped with Honeywell HTF engines.

Flexjet says in its suit that in the first three years of the MSA until 2021, Honeywell failed to meet the schedule but honored the terms of the agreement and paid Flexjet the $30,000 per day in liquidated damages for engines not returned on time.

But things only got worse, and in November 2021 Honeywell asserted Force Majeure, citing covid-related issues. However, Flexjet said discovery in the lawsuit revealed that Honeywell had problems keeping up with the schedule from the start, and that pointing the finger at the covid pandemic was simply a pretext.

Kenn Ricci, Chairman of Flexjet, said he believes that despite signing the 15-year MSA, Honeywell was “unprepared for the pace of repairs.”

The Supreme Court of the State of New York is working the case and so far, has found summary judgment in favor of Flexjet on several key issues. Honeywell is appealing.

FMI:  flexjet.com/ , aerospace.honeywell.com/