TAR Aerolíneas in Dispute with Willis Lease Finance Over Engine Return

Willis Lease Finance Corporation has disclosed that TAR Aerolíneas, based in Mexico, has not complied with a demand to return a leased Rolls-Royce AE3007 engine. This issue comes alongside several overdue payments, despite a notice served to the airline on January 16, 2024. The engine in question is currently installed on an Embraer E145 aircraft, XA-AFH, which is being operated by the newly revitalized state-owned Mexicana airline.

According to Willis Lease Finance, the failure of TAR Aerolíneas to adhere to the terms outlined in the notice—including the settlement of overdue payments and the return of the leased engine—has led to a continuing default situation. The Mexican regional carrier’s CEO, Ricardo Bastón, has reportedly declined to return the engine, further complicating the matter.

TAR Aerolíneas’ fleet, as per the ch-aviation fleets module, consists entirely of E145 aircraft, totaling ten units. In 2023, the airline entered into a long-term financing arrangement with Ethos Asset Management, a U.S.-based company, aiming to bolster its operational capabilities.

The airline’s partnership with Mexicana involves the wet-lease of two E145 aircraft, including the one in dispute. Mexicana also benefits from the complimentary wet-lease of three Boeing 737-800s provided by the Fuerza Aérea Mexicana (FAM), demonstrating the intricate leasing relationships within Mexico’s aviation sector.

As this situation unfolds, inquiries have been made to TAR Aerolíneas, Ethos Asset Management, and Willis Lease Finance Corporation for further comments regarding the dispute and potential resolutions. The inability to return the leased engine not only affects TAR Aerolíneas’ operations but also underscores the complexities of aircraft leasing and the challenges of managing aviation assets.