Saudia denies claims after lessor sues for $460mn

Saudia (SV, Jeddah) has said it would defend itself against what it called inaccurate claims after Shariah-compliant lessor Alif Segregated Portfolio Company filed a lawsuit against it at the High Court in London. In the suit, filed in September over alleged non-payment of lease agreements regarding fifty Airbus aircraft, the lessor is seeking at least USD460 million in unpaid leasing and maintenance costs, Reuters news agency reported on October 27 citing court materials. The International Airfinance-managed Alif Segregated Portfolio Company, which is incorporated as a Cayman Islands company but based in the United Arab Emirates, has also demanded other damages and costs in its complaint against the Saudi flag carrier. It said Saudia failed to pay after seeking to ease the payment schedule during the coronavirus crisis and also allowed “unauthorised and unnotified engine and part swaps.” The court confirmed to Reuters that a claim had been filed but not yet acknowledged by the defendant. The airline told the news agency in a statement that it meets its contractual commitments and would defend itself against erroneous claims. “We are currently in discussions with the lessor to resolve contractual differences, and we believe that common sense will prevail in the end,” it said without specifying details. Active legal proceedings have not yet begun, it added. The Alif-Saudia agreement, which Airbus announced at the 2015 Paris Airshow, was praised at the time as being the biggest aviation deal secured via Islamic financing, underscoring the growing importance of such funding to the airline industry.