Flair Sues Lessors Over Aircraft Seizures
Flair Airlines filed a $50 million lawsuit in Ontario Court this week claiming that three leasing companies conspired with one of Canada’s two largest airlines – either Air Canada or WestJet, it’s not saying which – to illegally seize four of its airplanes in the middle of the night.
Flair admits it was behind on its payment of $1 million by a couple days, but that the lessors knew the money was on its way, also adding that seizing planes over one missed payment of a couple days is highly unusual. The carrier claims the lessors set it up for default, and now plan to lease the aircraft to another carrier on more favorable terms while also dealing a blow to the ULCC upstart.
In claiming significant damages, Flair also says its leasing management company Airborne Capital, led the conspiracy, colluding with another airline to make a deal to buy or lease the aircraft, leading Flair to claim of breach of contract. It’s widely expected this case won’t be settled in a Canadian courtroom but in a wrestling ring with Ric Flair naturally representing Flair against a to-be-determined representative for Airborne Capital.
United Projects Q1 Loss
United Airlines updated its quarterly guidance with the SEC to project a negative Q1 due to what it is calling an incorrect RASM forecast.
RASM, which stands for revenue per available seat mile, is a crucial metric in the airline world and not something an airline wants to get wrong. United CEO Scott Kirby did say he is confident about their projections for Q2 and the rest of the year, despite the troubles during the first three months.
In the filing, UA says fuel prices went up more than it expected leading to higher costs, business travel did not bounce back as much as it thought it would, and it baked in a significant raise for the pilots into its earnings forecast. Conspiracy theorists are alleging this forecast is a false flag designed to eek savings out of its current negotiations with pilots.
United is looking at several options to cut costs for the rest of the year other than shafting its pilots in these negotiations, including ending all flights to Newark or saving on labor costs by offering an elite member of each flight an opportunity to be the first officer.
Saudi Government Announces Riyadh Air
Because the only thing better than one national flag carrier is two national flag carriers, the Saudi government announced its newest
boondoggle venture Riyadh Air. The new airline, led by former Etihad CEO Tony Douglas says it’ll serve more than 100 destinations by 2030.
The Saudi government claims the airline will add $20 billion to Saudi Arabia’s non-oil GDP growth and will create more than 200,000 new jobs — or let’s say 500 billion jobs because it’s silly either way. The carrier is fully owned by the Saudi sovereign wealth fund with minor contributions from every American who’s ever stopped and put gas in their car. One focus will be on dominating leisure travel, both for those traveling to the Kingdom and as an east-west connecting point similar to what other middle eastern carriers have done. It also recognizes that massive opportunities exist both for business travel and pilgrimages to Mecca, located about 600 miles from Riyadh.
The new airline will operate alongside Saudia, the current state-owned flag carrier. Saudia is a member of SkyTeam while Riyadh Air seems to plan on going it alone – at least at first. Service is expected to begin by next year, and now all it needs are airplanes.
For more on Riyadh Air, please visit Thursday’s post on crankyflier.com.
New Saudi Carrier a Dream for Boeing
Speaking of airplanes…Startup Saudi carrier Riyadh Air and established flag carrier Saudia are combining on an order from Boeing for nearly 80 Dreamliners with an option to purchase up to 40 more.
Both carriers are expected to purchase 39 airplanes from Boeing, for a total of 78, at a rack rate of about $35 billion for the entire order. This order is another in a resurgence for Boeing, as its order book has been filling up in the last several months – including an order of 100 Dreamliners United agreed to late last year.
Boeing is expected to resume delivery of its Dreamliner series this week after a brief pause that came from a data analysis issue that is hopes doesn’t end up as a story on 60 Minutes at any point in the future.
Alphabet Soup: DL Defeats AA in EU Court
American Airlines lost its final court appeal to win back two slots it divested itself of during its merger with US Airways a decade ago, codifying Delta’s right to operate the two slots in perpetuity.
American was forced to give up two slots out of Philadelphia and London/Heathrow to satisfy antitrust regulators in 2013 and the EU commission assigned them to Delta. EU rules state the slots are granted in perpetuity provided they’re operated regularly. AA contended Delta was to busy counting its Biscoffs to regularly use the slots and sued to get them back.
Europe’s highest court, the EU Court of Justice ruled against AA’s claim that Delta did not use the slots appropriately. AA first challenged Delta’s slot use in 2020 when it was defeated in court before appealing to the CJEU. As part of the ruling, Delta locks up its ownership of the two slots while American was forced to pay Delta’s attorney fees for the case and also require food vendors at its Philadelphia hub to refer to cheesesteaks on the menu as “Atlanta cheesesteaks” for a period of six months.
- Air France fully repaid the €2.5 billion it owed the French government on the pandemic-era loan it was given.
- Air Serbia is quenching its thirst by adding flights to Hungary.
- Airnorth is seeing things go south as its unable to add any additional E190s to its fleet.
- ANA is resuming nonstop service from Tokyo to both Brussels and Munich. Service to Brussels began earlier this week and will operate 2x weekly from Tokyo/Narita, while Munich flights will operate 3x weekly beginning March 26, operating from Tokyo/Haneda.
- Cathay Pacific is bringing first class back on several routes which is good news for at least two or three people reading this. It also plans to unpark all of its aircraft by 2024 — except for that one plane that got the really good spot in front of its building. That one’s staying forever.
- China Airlines, and its main two competitors in Taiwan — EVA and Starlux — posted successful February sales after more border restrictions were lifted.
- Delta‘s former ticket agent Aquil Mohammed pleased guilty in federal court for the minor, overblown crime of issuing free, non-rev tickets to friends and family and charging them cash, while also issuing fake vouchers to cover the taxes. Apparently Delta and the Justice Department are against outside-the-box thinking and creative ways to earn money.
- Emirates plans to fly its A380 more this summer. Standby for more breaking news. More breaking news: Emirates introduced a new livery.
- EVA is purchasing five B787 Dreamlinas that it hopes will fly foreva.
- GlobalX is leasing an additional A321 freighter this year.
- Hi-Fly is flying high after adding another A330-200 to its fleet.
- ITA will begin operating A330neos late next year, provided its still solvent at that point.
- JAL is buying airplanes.
- JetBlue is going to grow Orlando if its merger with Spirit is approved. It promises.
- Lufthansa‘s takeover of ITA will not cause any regulatory issues and is a net positive for customers, employees, and the industry. Just ask Lufthansa.
- Qatar is not interested in purchasing any more airlines. Unless it changes its mind.
- Ryanair is adding 14 new routes from Dublin.
- SpiceJet is being peppered with questions after two aircraft were repossessed. It took several people to physically take possession of the two aircraft as planes are notably hard to curry.
- Southwest now expects to end the year with 883 airplanes, down 10 from its previous expectation. Those planes can be moved to the top of the queue if any of them are willing to buy up to Wanna Get Away Plus.
What baseball position do leprechauns play?