The US-based private investment firm that owns budget carriers Flair Airlines in Canada and Bonza in Australia is facing legal action for almost US$30 million in alleged unpaid aircraft leasing fees plus further damages.
The legal action is being pursued against 777 Partners by a trio of aircraft leasing companies and relates to four Boeing 737s that were leased to Flair, in which 777 Partners has a 25% shareholding.
The litigation, lodged in the High Court in London, stems from the termination of lease agreements for three 737 MAX 8 and one 737-800 leased to Flair that were repossessed by three individual lessors due to outstanding lease payments.
The lessors, named in the claim as Corvus Lights Aviation, MAM Aircraft Leasing, and Columba Light Aviation, are seeking US$28.5 million from 777 Partners. This figure includes damages for breach of contracts, lost lease income, interest on unpaid fees, costs to repossess the aircraft, and costs relating to reconfiguring the planes for new lease agreements.
The lease contracts were terminated on March 10, 2023, and all four aircraft were repossessed by the leasing firms following the issuing of two default notices to 777 Partners on February 16 and 22, 2023, according to the legal papers. The total amount of unpaid lease payments plus interest at the time of repossession was $2.2 million.
In September 2023, the three lessors reportedly sent further payment demands to 777 Partners regarding the Flair leases, which they claim were ignored.
“Despite being repeatedly notified of their financial obligations, 777 Partners have continued to ignore calls to settle outstanding payments of almost $30m,” the lessors said in a statement. “777 Partners cannot just ignore its financial and contractual obligations. This legal action is a last resort.”
777 Partners said the legal action being launched by the leasing companies was “at best premature and at worst possibly abusing the English court system”.
Complicating matters further, not long after the repossessions took place, Flair launched its own legal action in Canada against Airborne, the intermediary company that arranged and managed the leases on behalf of the lessors.
In that action, Flair is seeking $37 million in damages for disruptions Airborne allegedly caused its flight operations and also reputational harm following the repossession of the four aircraft which made up 25% of the airline’s total fleet at that time.
As a result, the repossessions saw 777 Partners divert new 737 MAX 8 aircraft that had been earmarked for its newly established carrier, Bonza, to Flair instead, leaving the Australian newcomer struggling for capacity in its first few months of operations. The airline, in which 777 Partners is the sole owner, has since received two leased Flair 737s to cover the shortfall and open new routes.
