Airline leasing company BOC Aviation has filed a claim at the London court against AirAsia X and its wholly-owned subsidiary AXX Leasing Two for $23 million, claiming outstanding liabilities. The filed lawsuit for alleged breach of a contract among the companies might highly affect the airline’s financial stability as travel restrictions have already hit AirAsia X hard.
AirAsia X confirmed that both the airline and its subsidiary have received a letter of a material litigation claim filed in the High Court of Justice in the Business and Property Courts of England and Wales on August 19, 2020.
BOC Aviation has sued AirAsia X for nearly $23 million dues related to the lease of four non-specified aircraft, as revealed in an official Bursa Malaysia document. The leasing company is reportedly arguing that AAX Leasing Two breached obligations of four lease agreements.
BOC Aviation and AirAsia X subsidiary signed the leasing agreement for four aircraft in November 2014 and later revised it four years later – in December 2018.A cash outflow of $23 million might highly affect the airline’s financial liquidity as the collapse in travel demand has already hit the company’s profitability. On August 27, 2020 the carrier reported an operating loss of $77.4 million for the second quarter 2020.
Due to a dire financial state, earlier in August 2020, the carrier announced the sale of its two Airbus A330s in a pursuit to raise cash about $100 million as a part of the strategic plan to climb out of the financial pit, as stated in the company’s financial report. The carrier was considering returning a non-specified quantity of A330 aircraft to lessors. The airline was seeking to reach an agreement to return jets without any termination costs and thus shed a part of its financial liabilities.
According to PlaneSpotters fleet data, as AirAsia X’s fleet is composed entirely from A330-300s, it could be assumed that a juridical dispute among the companies possibly could have arisen because of A330s leasing agreement.
The claim against AirAsia X appears to be largest recovery litigation case so far. On August 25, 2020, Irish leasing company Peregrine Aviation Echo sued Bejing’s Capital Airlines in London over unpaid lease agreement for two Airbus A330-200 aircraft.
The Irish lessor filed a claim against Chinese budget airline for reportedly defaulting on rental payment. The breach of the contract suit has arisen from three separate leases for A330-200 aircraft, all entered into in 2015. Currently, the lessor is suing for more than $7 million debt.