Canadian budget carrier reaches leasing deal for two 737 MAX jets after lessor spat
2:06 pm Wednesday, June 14th, 2023
(Reuters) – Flair Airlines said on Wednesday it is leasing two more Boeing 737 MAX jets to meet rising travel demand, after the Canadian budget carrier lost access to four planes earlier this year in a dispute with a separate lessor.
Small, privately held Flair is taking the planes through a sale-leaseback deal with SMBC Aviation Capital, the world’s second-largest aircraft lessor, and will begin flying this summer, a company spokesperson said.
While Flair claimed it had gotten MAX planes from Boeing Co at “a great price” in 2021, just months after they were returned to service following two crashes, Flair CEO Stephen Jones says MAX prices are back to where they were before the 2019 grounding.
Boeing and European rival Airbus SE are ramping up production of narrowbody jets to meet surging travel demand.
“It’s clear that pricing has become very firm again,” Jones said in an interview.
In May, Ireland’s Ryanair placed a major Boeing MAX order after reaching a truce on pricing.
Jones said the deal shows Flair has the confidence of a big global leasing company, after the ultra-low-cost carrier had four aircraft seized in March as a result of a commercial dispute with a New-York based hedge fund and aircraft lessor.
“We were really surprised and upset by the actions taken,” he said.
Lessor Airborne Capital has said the aircraft deal ended following a five-month-long period during which Flair was regularly in default of its leases by failing to meet its payments when due, with payment arrears reaching millions of dollars.
The matter is now in court. With the two additions, Flair will operate 21 jets.
Jones said he expects strong summer travel in Canada with the number of seats above 2019 levels due to new entrants.
(Reporting By Allison Lampert in Montreal; editing by Jonathan Oatis)
