Sahara row with U.S. company

By Our Special Correspondent

NEW DELHI, APRIL 14. The Sahara Airline got into a scrap on Thursday with one if its U.S.-based aircraft leasing company over an outstanding payment, but before the latter could initiate any action, the airline did a quick damage control exercise and saved the day.

The International Lease Finance Corporation (ILFC) alleged that Sahara had defaulted by three to four months on rentals for its two dry leased Boeing 737-400 aircraft. The airline reportedly owed the company about $1.5 million. The vice- president of the ILFC, Mr Michael Platt, even flew down to New Delhi on Thursday to take back the two aircraft. But even as Mr. Platt was sharing his woes with ``select'' media, there came the news that Sahara would make part a payment by Monday. Mr. Platt later said ``in all fairness'' the ILFC had decided to wait until this banking transaction was over.

Asked about the default, the Sahara Airlines said it did owe the company some rental, but made a payment of $ one million to the ILFC in New Delhi, ``just before the press conference''. Now what was outstanding was one-month lease rent for the two aircraft. According to the airline, the dispute was over one of the aircraft which had recently undergone D-check in Dublin, Ireland. The aircraft had been powered with new engines and was almost as good as new. The airline alleged that the ILFC had raked up the issue of default in payment to take back the aircraft so that it could be re-marketed at a higher price. With its plans for expansion with new generation aircraft, Sahara may not have opted for continuation of the lease when it terminated in November 2000. The airline has a fleet of nine aircraft.

Sahara also alleged that the ILFC owed them $1.6 million as part of maintenance reserves that the airline paid over last five years. An ILFC representative in India, however, said there was no question of re-marketing the aircraft as long as the lease with Sahara was valid.

But Mr. Platt raised another issue. According to him, when he met the Director-General Civil Aviation (DGCA) to de- register Sahara for non-payment of the rentals, as per a contract entered into with the airline, the DGCA asked him to seek redress in court. ``This happens nowhere in the world. If there is default in payments, we are well within our rights to take our airplanes back.''

According to him, what precipitated the matters on with Sahara was that the leasing company had to chase the airline to get the rental. ``If an airline has a problem, we can work it out with it. But we don't want to be chasing it for our payments.''

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