State-owned Saudi Arabian Airlines is facing a claim in London’s High Court filed last month by a Dubai-based financial services firm over an alleged breach of lease agreements of 50 Airbus aircraft, court documents showed.
“WE ARE CURRENTLY IN DISCUSSIONS WITH LESSOR TO RESOLVE CONTRACTUAL DIFFERENCES”
Alif Segregated Portfolio Company, which specialises in shariah-compliant aircraft leasing, has filed a complaint against the Jeddah-based carrier, also known as Saudia, in which it could seek at least $460 million in unpaid rent and maintenance cost. Alif also demands other damages and costs, the documents seen by Reuters showed.
It declined to comment on specific details of claims made against it but said that active legal proceedings had not begun. “We are currently in discussions with the lessor to resolve contractual differences, and we believe that common sense will prevail in the end.”
The deal between Alif and Saudia, announced by Airbus at the 2015 Paris Airshow, was hailed as the largest aviation deal to be secured via Islamic financing. The 50 aircraft, which account for a third of Saudia’s fleet, were worth around $8.2 billion when the deal was announced.
Under the deal, Alif’s managing unit International Airfinance Corporation (IAFC) bought the planes, which included 30 A320neo and 20 A330-300 aircrafts and leased them to Saudia.
Saudia has been struggling since the coronavirus pandemic brought global aviation to its knees. Saudi Arabia in March suspended flights and banned Muslims abroad from performing pilgrimages in the kingdom which normally attract millions of foreign visitors.