Jets Seized from Canadian Airline | Aero-News Network
Aero-News Network
RSS icon RSS feed
podcast icon MP3 podcast
Subscribe Aero-News e-mail Newsletter Subscribe

Airborne Unlimited -- Most Recent Daily Episodes

Episode Date



Airborne-Wednesday Airborne-Thursday


Airborne On YouTube



Airborne-Unlimited-07.10.24 HOLIDAY


Fri, Mar 24, 2023

Jets Seized from Canadian Airline

Aircraft Leasing Business Goes Mercenary

The repossession of Part 121 airliners for failure to make timely lease payments is rare in the Western World, particularly in North America. However, a recent incident involving Canadian ultra low-cost carrier (ULCC) Flair Airlines may well occasion the emergence of a new, worryingly draconian business model among aircraft lessors.

On the morning of 11 March 2023, as legions of Torontonian college students newly paroled to spring break sipped their breakfast Molsons and Kokanees and made ready to catch a Flair Airlines flight from Region of Waterloo International Airport (YKF) to sunny, anthropomorphic-mouse-infested Orlando, a strange drama was playing out on the YKF tarmac.

Unbeknownst to the Canadian sun-seekers, some three-hours prior to the scheduled 07:20 EDT departure of their flight, bailiffs arrived at YKF for purpose of taking possession of the Flair Airlines Boeing 737 MAX aircraft by which the group was to be conveyed to America’s Sunshine State.

As the sun rose on that weird morning, two police vehicles drove onto the YKF ramp and parked alongside the jet. Officers, cool and remote as dancing girls,  inspected documents citing nonpayment of the aircraft’s lease.

Deeming the paperwork in order, the officers stood back and permitted the bailiffs to seize the Flair Airlines 737 MAX, thereby forcing the abrupt and unwelcome cancellation of the Orlando flight. Hundreds of incensed people were left stranded and scrambling to ascertain alternate means by which to get themselves and their intentions to Orlando.

Behind the antecedent YKF-Flair Airlines incident is a new business model conceived of and implemented by Miami-based investment firm 777 Partners—a scheme initially and enthusiastically embraced by Boeing.

Currently, 777 Partners has firm but unfilled orders pending for 34 737 MAX narrow-body jets. However, during 2022’s closing months, the company found itself in the unenviable position of being unable to accept 11 737 MAX jets for which it had previously contracted. The faux pas compelled Boeing to offer the aircraft to an alternate lessor—which eagerly snapped up the proffered jets.

The unseemly situation at Flair Airlines, in which 777 Partners holds a 25-percent ownership stake, has raised doubts pertaining to the latter entity’s ability to meet its future 737 MAX commitments to Boeing.

At the July 2022 Farnborough Air Show, 777 Partners co-founder Josh Wander announced his company had agreed to purchase a whopping 66 additional 737 MAX airliners. The agreement was never finalized, however, and those 66 jets remain absent from Boeing’s order book.

Ergo, the immediate question—one neither company conceded to answer on the record—is whether the 777 Partners will make good on the purchase agreements it negotiated with Boeing.

Edmonton, Alberta-based Flair Airlines placed its inaugural order for Boeing 737 MAX airliners in 2021. The jets were key to the air-carrier’s aspiration of establishing itself as an “ultra-low-cost carrier” in Canada, a functionally socialist nation in which airfares are historically and consistently high.

In early 2022, large competing full-fare airlines—Air Canada and WestJet, the Great White North’s first and second-largest air-carriers respectively—endeavored to persuade the Canadian government to revoke Flair’s operating certificate, alleging 777 Partners’ funding was in violation of Canadian laws prohibiting foreign control of Canuck airlines.

In June 2022, following 777 Partners’ forfeiture of a number of its board seats and Flair’s offering of assurances that it retained alternative financing options, the Canadian Transportation Agency ruled the air-carrier was sufficiently Canadian-controlled.

Flair portrays the seizure of its aircraft—four of which have been repossessed to date—as a backdoor attempt by larger Canadian airlines to retain their veritable monopoly on the nation’s air-travel market. Pursuing its contention, Flair Airlines filed a $50-million lawsuit last week against Ireland-based lessor Airborne Capital—which seized two of the four 737 MAX aircraft thus far nabbed from Flair—as well as additional lessors and an unnamed competing airline. Flair alleges the defendants named in its suit took advantage of a “technical default” because they “found a better deal” leasing the planes elsewhere.

During a 20 March 2023 interview, Flair Airlines CEO Stephen Jones characterized the repossession of his airlines’ aircraft “unwarranted,” stating: “It was $1.3-million that was overdue, outside the grace period by about five days. … and  I was in communication with Airborne telling them they would be paid early in the following week, Monday, [or] Tuesday.”

Mr. Jones has publicly downplayed the $1.3-million shortfall, asserting the amount equals less than half of Flair’s daily revenues.

In a statement, Airborne Capital set forth the termination of the 737 MAX leases followed “a five-month long period during which Flair was regularly in default of its leases by failing to meet its payments when due, with payment arrears reaching millions of dollars.”

Airborne further alleged that Flair, despite repeated direct messages requesting the air-carrier to meet its obligations, “missed payments and lease defaults persisted.”

Mr. Jones does not dispute his airline was often late in making lease payments, arguing: “We’re a startup airline going through one of the toughest times of the season. And so there were times that we were late. But we always cleared it up and we were always in communication.”

Citing allegedly persistent failures to remit timely lease payments, aircraft lessors—prior to the seizure of the four 737 MAXs—were actively shopping 11 of Flair Airlines’ 737-MAX jets to other air-carriers.



More News

Airborne-Flight Training 07.11.24: Alabama Av HS, Med Certs, Diamond-Turkish A/L

Also: PAL Aerospace, ERAU Eclipse, Second Las Vegas Airport, Drone MIL Exhibition The Alabama Aerospace and Aviation High School (AAHS) enrolled its first 9th and 10th grade studen>[...]

ANN's Daily Aero-Term (07.12.24): Minimum Fuel

Minimum Fuel Indicates that an aircraft's fuel supply has reached a state where, upon reaching the destination, it can accept little or no delay. This is not an emergency situation>[...]

Classic Aero-TV: Portrait of Montaer’s MC-01

From 2023 (YouTube Version): Brazil’s Take on The LSA Based on DeLand, Florida’s DeLand Municipal Airport (DED), Aero Affinity Holding Corporation maintains the rights >[...]

ANN FAQ: Q&A 101

A Few Questions AND Answers To Help You Get MORE Out of ANN! 1) I forgot my password. How do I find it? 1) Easy... click here and give us your e-mail address--we'll send it to you >[...]

Aero-News: Quote of the Day (07.12.24)

“I look at the Cessna SkyCourier as a next generation aircraft for Bush Alaska. The SkyCourier Combi will allow us to be flexible and serve the unique needs of citizens in re>[...]

blog comments powered by Disqus





© 2007 - 2024 Web Development & Design by Pauli Systems, LC