Saudia (SV, Jeddah International) has said it would defend itself against what it called inaccurate claims after Shariah-compliant lessor Alif Segregated Portfolio Company filed a lawsuit against it at the High Court in London.

In the suit, filed in September over alleged non-payment of lease agreements regarding fifty Airbus aircraft, the lessor is seeking at least USD460 million in unpaid leasing and maintenance costs, Reuters news agency reported on October 27 citing court materials.

The International Airfinance-managed Alif Segregated Portfolio Company, which is incorporated as a Cayman Islands company but based in the United Arab Emirates, has also demanded other damages and costs in its complaint against the Saudi flag carrier. It said Saudia failed to pay after seeking to ease the payment schedule during the coronavirus crisis and also allowed “unauthorised and unnotified engine and part swaps.”

The court confirmed to Reuters that a claim had been filed but not yet acknowledged by the defendant. The airline told the news agency in a statement that it meets its contractual commitments and would defend itself against erroneous claims.

“We are currently in discussions with the lessor to resolve contractual differences, and we believe that common sense will prevail in the end,” it said without specifying details.

Active legal proceedings have not yet begun, it added.

The Alif-Saudia agreement, which Airbus announced at the 2015 Paris Airshow, was praised at the time as being the biggest aviation deal secured via Islamic financing, underscoring the growing importance of such funding to the airline industry.

Under the agreement, Saudia ordered twenty A330-300Regionals and thirty A320-200s, worth about USD8.2 billion when the deal was announced, as part of plans to double its fleet to almost 200 by 2020. International Airfinance, which manages the Aircraft Leasing Islamic Fund (ALIF), bought the jets and leased them to Saudia.

The carrier continues to operate them, the ch-aviation fleets module shows, alongside an additional twelve A320-200s and twelve A330-300s, plus fifteen A321-200s, thirty-five B777-300ERs, thirteen B787-9s, and five B787-10s. On the cargo side, it operates four B777-200Fs, as well as two B747-400(BDSF)s and one B747-400FSCD, both wet-leased in from Air Atlanta Icelandic (CC, Reykjavik Keflavik).