The New York-based company that seized four leased aircraft from Flair Airlines last weekend says the move was a “last resort” following months of missed payments, denying accusations it was working with another carrier to push the low-cost airline out of business.
In its first public comments on the matter Tuesday, Airborne Capital Ltd. said in a statement to Global News that Flair was “regularly in default” and failed to make payments when due over a five-month period, despite numerous notices and “direct and regular contact” with the airline.
Those missed payments added up to millions of dollars, the lessor said — disputing statements from Flair’s chief executive this week that it owed about $1 million total.
“Terminating an aircraft lease is always a last resort, and such a decision is never taken lightly,” Airborne said.
“In this case, following numerous notices to Flair, it again failed to make payments when due and Airborne took steps to terminate the leasing of the aircraft.”
Tuesday’s statement came a day after Flair CEO Stephen Jones suggested Saturday’s seizures may have been instigated by another carrier attempting to disrupt Flair’s operations.
“We’ve come in and upset the cozy duopoly, and as a consequence people want us out of business,” he said at a news conference on Monday.
“And we do believe that there were negotiations going on behind the scenes between one of the majors and the lessor to hurt Flair by them offering probably above-market rates for the aircraft we’ve been leasing.”
Jones did not offer any specifics to back up the claim.
“While I’m not going to name names or cite evidence, I believe that there is much more to this picture than the surface that you see,” he said.
WestJet Airlines, Canada’s second-largest airline, did not respond to a request for comment.
A spokesperson for top carrier Air Canada said the company had not spoken to any of Flair’s lessors, “nor have they come to us offering their aircraft.”
Jones also claimed the four Boeing 737 Maxes were “only a few days in arrears” with about $1 million owing, “which is about half of one day’s sales for us.”
Airborne said Tuesday it “strongly rejects the accusations that have been made by Flair Airlines in recent days” about the dispute.
It added despite efforts to mitigate losses resulting from Flair’s default, “material losses are expected in relation to the repossession and remarketing of the aircraft” — suggesting it will be shopping the planes to other carriers.
Jones acknowledged Monday “it would be tough” to retrieve the aircraft from Airborne.
The sudden seizure of more than one-fifth of Flair’s operating fleet saw the budget carrier scramble to roll out other planes over the weekend, as passengers in Toronto, Edmonton and Waterloo, Ont., dealt with last-minute flight cancellations.
About 1,900 travellers saw their flights cancelled Saturday, with some 420 of them rebooked within three days, Jones said Monday. Others opted for reimbursement.
No flights were cancelled Sunday or Monday as the company brought out three planes that had been waiting in the wings ahead of summer travel season, on top of a fourth freshly leased plane, he said.
—With files from The Canadian Press