Court Asked to Dismiss Flair Airlines’ CAD51 Million Lawsuit as “Frivolous” by Aircraft Lessors

Lawyers representing the lessors involved in the March 2023 seizure and repossession of four Boeing aircraft from Flair Airlines have called for the dismissal of the carrier’s CAD51 million (USD37.7 million) lawsuit, labeling it as “frivolous.” The legal battle, unfolding in the Ontario Superior Court of Justice, pits Flair Airlines against leasing special purpose vehicles (SPVs) and Airborne Capital, with allegations of breach of contract and wrongful seizure at its core.

Flair Airlines initiated legal action following the repossession of a B737-800 and three B737-8s due to missed lease payments, seeking substantial damages for what it claims were unjust actions by the lessors. The aircraft in question, including one now operated by Ethiopian Airlines, and three others in storage in Canada, are central to a contentious dispute that underscores the financial pressures and operational challenges facing the airline.

In a recent court appearance, the lessors’ defense argued against the validity of Flair’s claims, criticizing the lawsuit for its lack of specificity regarding alleged breaches of lease terms. This move to dismiss most of the airline’s claims is based on assertions that the lawsuit could potentially hinder a fair trial and was described as an abuse of court process.

Despite the lessors’ pushback, Flair Airlines maintains that its legal filings comply with court schedules and insists that its current lease agreements are up to date. The ongoing legal tussle reveals deeper issues surrounding Flair’s operational sustainability, including a significant tax debt to the Canada Revenue Agency (CRA). However, Flair’s CEO, Stephen Jones, has sought to reassure stakeholders, emphasizing that the airline’s arrangement with the CRA does not impact its operations and dismissing concerns over the airline’s long-term viability as overly pessimistic.

As the case continues to unfold, the aviation industry watches closely, with the outcome likely to have implications for Flair Airlines’ future operations and its relationship with aircraft lessors. With the legal arguments laid out and both sides standing their ground, the Ontario court’s decision will be pivotal in determining the next chapter for the embattled Canadian low-cost carrier.