Irish aircraft leasing firm AMCK Aviation has threatened to ground or impound 14 of Frontier Airlines’ Airbus A230-200N aircraft. Frontier, the American low-cost carrier, has been attempting to stop these threats. Last week, the airline was granted a brief restraining order against its lessor.
The dispute
Disputes between each parties have been ongoing since last yr when the Dublin-based Irish aviation leasing company AMCK Aviation was taken over by the firm Carlyle.
Photo: Don Mammoser I Shutterstock
The American low-cost carrier told a Recent York District Court that if the aircraft leasing firm AMCK Aviation were to impound or ground these aircraft, the airline would face “damaging” implications that might disrupt operations. The Colorado-based airline said the move would ground a few tenth of the fleet.
Frontier has taken legal motion against Wells Fargo Trust Company and UMB Bank. Each parties are owner-trustees of AMCK Aviation. The Recent York court has ordered Frontier to pay a $2 million bond to cover the prices of AMCK Aviation.
Frontier can also be displeased with the acquisition of AMCK Aviation recently by the Carlyle Group – a worldwide investment firm. The airline claimed that its assets were “raided” by the acquisition, saying that since it already had an agreement with the group for 15 aircraft, its consent was required before any take-over of AMCK. As a substitute, the airline claims it came upon concerning the takeover via a press release.
The airline said, commenting on the injunction,
“When Frontier proposed reasonable conditions on those assignments to guard its right, defendants declared a lease default and threatened to ground or repossess the aircraft – a devastating motion not only for Frontier but for the traveling public,”
The defendant, Carlyle, said Frontier’s claim “presents a tale filled with sound and fury, but signifying nothing.”
Although Frontier says that it continues to honor its repayment obligations, Carlyle “demanded that Frontier sign its rights away to approve Carlyle’s assignments of the aircraft.”
Photo: Vincenzo Pace | Easy Flying
In accordance with research presented by ch-aviation, the aircraft that are prone to being grounded or impounded are:
- N326FR
- N331FR
- N332FR
- N336FR
- N338FR
- N349FR
- N350FR
- N351FR
- N353FR
- N354FR
- N358FR
- N359FR
- N370FR
All of those aircraft are Airbus A320neos and make up a good portion of the present Frontier Airlines fleet. With just 128 aircraft at its disposal, losing greater than 10% for an unknown period can be a bitter pill to swallow.
Impact of a grounding
The impact of a grounding of such a magnitude would see Frontier in a sticky situation. The airline would don’t have any alternative but to cancel a few of its flights – an enormous problem for passengers, crew, and airports.
Photo: Denver International Airport
With its 498 every day flights, the disruption can be significant, particularly if it were to occur throughout the busy summer period. Removing aircraft would remove Frontier’s ability to generate profit, thereby reducing its ability to keep up payments to the lessor. Understandably, the airline desires to avoid this in any respect costs.
A totally leased fleet
Frontier’s entire operation runs on leased aircraft – it doesn’t own a single plane. This is best, financially, for the airline, as it might adjust its fleet size faster in response to market demands. It’s a favourite model with all low-cost carriers.
Among the many lessors providing aircraft to Frontier are big names like AerCap, SMBC, Avolon and Boc in addition to many less well-known firms, for a complete of 19 lessors in all. None of those other lessors are in dispute with the airline.
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