The Canadian airline market was rocked over the weekend after four Flair Airlines Boeing 737 MAX aircraft were repossessed by their owner, Airborne Capital, over claims of payments owed for leasing the aircraft.
This led to multiple flight rescheduling just days before the peak of the March spring break season, affecting nearly 2,000 passengers.
After weathering the storm by bringing into commercial service three more aircraft it had in storage, Flair Airlines CEO Stephen Jones told during a news conference on Monday that the situation was precipitated by its main competitors who want the airline out of business.
“I think there were behind-the-scenes negotiations between one of the larger airlines and the lessor to hurt Flair by probably offering them above-market rates for the aircraft we have been leasing,” he said, although he said he would not name names or cite evidence, according to a Global News report. But the reference is to Air Canada and Westjet.
Jones said they were only a few days late in paying $1 million for the four Boeing 737 MAXs, which represents half of the sales they make in 24 hours.
When the pandemic broke out, many airlines renegotiated leasing contracts for much lower values because they were unable to continue paying regular rates while the planes were in storage due to government restrictions on the movement of people.
See also: Flair Airlines schedules new flights to Mexico and the U.S.
But the industry’s recovery from 2021 onwards has caused leasing values to skyrocket again, especially as manufacturers have had problems in their supply chains to deliver new aircraft. This means that, in the event of any breach of contract, lessors are taking possession of their aircraft to place them with other airlines on more favourable terms.
The Flair Airlines fleet
According to ch-aviation, Flair Airlines operates a total of 22 Boeing 737-800 and 737 MAX 8 aircraft, all of which are leased.
It currently leases thirteen aircraft to 777 Partners, six to Airborne Capital, two to Zephyrus Aviation Capital and another to an unknown company. The airline expects to continue to take delivery of 737 MAX aircraft gradually as part of a fourteen-unit deal with 777 Partners, announced at the end of 2021.
Flair Airlines expects to have 27 aircraft in operation by the middle of this year to boost its route and seat offerings during the summer season.
