Four Flair Airlines Aircraft Seized by Lessors
Not looking good for Flair. They are behind in lease payments with at least two lessors, both of which were already actively seeking other airlines to take those aircraft. That's more than half of Flair's current fleet. If other creditors (Airport authorities, Fuelers, NAV Canada) get spooked and start demanding cash up front for services it could be the end of Flair. Reminds a bit of Jetsgo collapse back in 2004.
https://www.theglobeandmail.com/busi...-planes-lease/
An aircraft leasing company seized four planes operated by Flair Airlines on Saturday for non-payment, causing the cancellation of several of the discount carrier’s flights at the start of the busy March Break travel season.
Working with bailiffs, the leasing company, Dublin-based Airborne Capital Ltd., issued lease termination notices to Flair representatives and grounded four Boeing 737s, two at Toronto Pearson Airport, one in Edmonton and one in Waterloo, Ont. Airborne also leases to Flair another two 737s, which have not been seized.
Flair’s Chief Executive Officer Stephen Jones said in an interview on Saturday that the Edmonton-based discount airline owes about US$1-million on the leases, and decried the seizures as “draconian.”
”We feel pretty aggrieved,” Mr. Jones said. “We think the impact of these actions on our crews and communities is unwarranted. But we are where we are.”
He said Flair fell behind in its lease payments after a “tough” winter on some routes. “We’ve had to manage cash very closely,” he said. “Going through the winter we have at times had to have discussions with them about terms of lease payments,” he said.
Flair leases six planes from Airborne and another five from Bank of China Aviation. Both leasing companies were approaching other airlines to take on the leases for the 11 Flair Boeing 737 passenger jets as recently as February, according to two people familiar with the situation. The Globe is not identifying them because they are not authorized to speak publicly on the matter.
Mr. Jones said Flair recently paid its arrears to Bank of China, but failed to come to an agreement with Airborne on four planes.
The aircraft that were being shopped around - 10 737 Max and an older 737 NG - were offered to several airlines, domestic and foreign. Because the aircraft are certified to fly in Canada, they are more attractive to a domestic airline because of the fewer licensing steps required to put them in service.
Canadian airlines that fly the 737 Max include Air Canada, WestJet Airlines, Lynx Air, and Sunwing Airlines. The airlines declined to comment or did not respond to questions.
State-owned Bank of China Aviation declined to comment. Airborne Capital did not respond to messages.
The Boeing 737 Max sells for about US$50-million, and is leased to airlines for monthly charges of about US$350,000 to US$400,000. Before the lease terminations, Flair had 19 737s in its fleet.
Flair plans to fly more than 6,200 flights in July and August of 2023, a 46-per-cent increase over the same months in 2022, according to data provided by Cirium. Mr. Jones said in December, when the fleet consisted of 19 planes, that Flair would have enough aircraft by the summer.
Mr. Jones told reporters in a news conference on March 7 that the Edmonton-based discount airline would be adding six planes to its fleet, and made no mention of the possible loss of the aircraft. He said new routes and more flights were on the way. “Some really great expansion coming into our network,” Mr. Jones said.
Mr. Jones’s promise of six new planes is fewer than the eight he had previously said were to be delivered. This, he said, is because of “both the aircraft availability and our view of the market and pilot availability for that matter. So was a considered decision, but there’ll be six aircraft.”
“We still have the overall goal of getting to 50 aircraft by 2025,” Mr. Jones said. “So we’ll just pace ourselves towards that. But frankly, if we got to 45 or we got the 55, I don’t think it would be that much of a difference because the goal is really to, to prove out the low cost carrier model in Canada. And that’s to say it doesn’t change on one or two aircraft.”
Quote
Originally Posted by Maxx Mazda
