Dealing with lease defaults

Eleanor Steed
By Eleanor Steed March 28, 2018 15:35

Dealing with lease defaults

It is a sad fact that many airlines across the globe, although striving to do so, just cannot keep to the terms of a lease agreement from time to time as the ebb and flow of an airline’s fortunes dictate which bills can and cannot be paid. But it is another matter entirely when an airline refuses to hand back an asset to a lessor.  At this time there are a number of airlines from China to South America that are having difficulty paying lease rentals on time. One of the worst offenders at this time seems to be Cameroon Airlines (Camair), which has not paid Willis Lease since August 2016 for the lease of one PW4060-3 engine, running up debts in the process of almost US$2m. The engine was leased to Camair in May 2014 but two years into the agreement payments ceased, and to date Camair has refused to return the leased engine. Camair has at this time one 17-year old 767 in storage and two 12-year old 737-700s (MSN33920 and 34480) which were on lease from Aviation Capital Group (ACG) but were sold by that lessor to the airline over a year ago. That deal was in hindsight both very well timed and prudent, for lessors left with assets at Camair seem to be in bother.

It is not known if the Willis Lease-owned PW4060-3 remains on-wing in storage or not, but payments stopped around the same time as the 767 aircraft went into storage and the 737-700s were purchased from ACG. Given that Camair has not responded to emails from us on this matter one can only assume that the airline is having funding difficulties from the Cameroon government at this time. Willis Lease has obtained a French judgment against the airline as it continues the process of enforcing its rights, including recovery of the asset and past dues.

Eleanor Steed
By Eleanor Steed March 28, 2018 15:35