Flair Airlines Ltd. has launched a $50-million lawsuit against several Ireland-based leasing companies following the recent seizure of four of its planes.
Flair alleges that the lease termination and repossession of aircraft was unlawful, invalid and non-compliant with lease agreements, according to a filing to the Ontario Superior Court of Justice dated March 14.
"Flair has incurred and will continue to incur substantial damages as a result of the defendants' malicious conduct," the lawsuit states.
The goal of the lawsuit is to force the leasing companies to return the seized aircraft and continue leasing them to Flair. The carrier is alleging breach of contract, fraudulent misrepresentation, wrongful seizure and conspiracy.
"After Flair paid millions of dollars in lease payments to the lessors, they found a better deal leasing or selling the aircraft to a third party," the lawsuit states. Flair says it was just a few days behind in payments, and alleges that it was "set up" by the leasing companies for a technical default.
"Airborne Capital's unlawful and immeasurably destructive actions were taken on the first weekend of many of our customers' school breaks," a statement from Flair reads. "This is profiteering on the backs of Canadians and was entirely unexpected and unwarranted."
Airborne Capital shot back this week, claiming that Flair had been "regularly" in default of its leases, failing to make payments and accumulating "millions of dollars" in arrears over a five-month period.
It says the move was not unwarranted: "Terminating an aircraft lease is always a last resort, and such a decision is never taken lightly," a spokesman for Airborne Capital said in a statement.
Flair CEO Stephen Jones has accused one of "Canada's major airlines" - he wouldn't say which one - of trying to damage its business.
"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," Jones said.
"Flair is here to stay," Jones said, adding that there are "airlines out there that don't want Flair to exist." He described the budget carrier as a "challenge to the status quo," saying it has "upset what was the cozy duopoly here in Canada."
Last September Flair announced plans to expand its fleet rapidly and become Canada's third-largest domestic airline by this summer.
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