777 Partners have strongly refuted allegations they are financially exploiting airlines they have stakes in, including Flair Airlines (F8, Kelowna) and Bonza (Sunshine Coast). The investment entity calls reports of overcharging for aircraft leases and applying above-market interest rates ignorant, misinformed, and lacking basic knowledge of how the aviation industry works.
A former 777 Partners principal, now suing the entity for breach of contract and fraud, has detailed several unsustainable practices in an affidavit filed with Delaware's Court of Chancery and reported on at length by the Josimar outlet. Timothy O'Neil-Dunne, who worked at 777 Partners between 2018 and 2021, and before that as chief commercial officer at Flair Airlines, alleges 777 Partners charges its subsidiary airlines between USD8 million and USD10 million more than it costs to acquire them, plus imposes an 18% p.a. interest rate on loans made to the airlines.
"The business is highly lucrative," the affidavit reads. "They (777 Partners) order these planes at below market rate for a new B737-8, paying approximately USD42 million to Boeing for each, and then lease them out based on the market value of a new Boeing 737, which is around USD52 million. Thus, the 777 jet partners are realising a profit of USD8 - 10 million dollars per plane at the time of delivery. 777 Partners is expected to accumulate a net asset value of more than USD1 billion by operation of the jet leasing business."
777 Partners, which styles itself as an "alternative investment platform that helps bold entrepreneurs," has twenty-two B737-8s on its books, with five placed at Bonza, 12 at Flair Airlines, one at GOL Linhas Aéreas Inteligentes (G3, São Paulo Congonhas), and two at Sunwing Airlines (WG, Toronto Pearson), with the remaining three unassigned. A further thirty-two B737-8s are on order at Boeing.
Flair Airlines declined to comment on the matter, and Bonza referred ch-aviation to 777 Partners. Joshua Wander, managing partner at 777 Partners and the subject of the Josimar investigation, did not respond to ch-aviation's request for comment. However, a statement released by 777 Partners strenuously refutes the suggestion that they are seeking to disadvantage the airlines they invest in, saying doing so would be illogical and run contrary to their own interests.
"All leasing relationships have been struck at an arm’s length, fully commercial basis with respect to all terms and conditions," the statement says. Flair Airlines leases 12 aircraft directly from 777 Partners, with a further seven sourced from other lessors, while Bonza's four B737-8s all come from 777 Partners via assorted special-purpose vehicles. ch-aviation recently reported that 777 Partners is eyeing a stake in another low-cost carrier, South Korea's Eastar Jet (ZE, Seoul Gimpo).
"We remain steadfast in our support of the airlines we work with," reads the 777 Partners statement. "The allegations in the lawsuit are frivolous, and 777 Partners look forward to vigorously defending our case."
