Sahara Airlines, ILFC renew pact

By Our Staff Reporter

CHENNAI, APRIL 26. Sahara Airlines and International Lease Finance Corporation ( ILFC) have decided to renew their commitment to a long-term business relationship.

This comes in the wake of the recent controversy over the issue of an outstanding payment. The ILFC had alleged that Sahara had defaulted by three to four months on rentals for its two dry- leased Boeing 737-400 aircraft.

In a press release, Sahara said that it had entered into a lease agreement with ILFC for two Boeing 737-400s on September 13, 1994. The agreement is valid till September 30, 2000. Sahara has claimed that it had paid ILFC about $35 million as lease charges over the last five-and-half years. ILFC, it added, currently holds about $3 million of Sahara Airlines towards the security and maintenance reserves of the two leased aircraft.

Sahara Airlines was holding on some issues to seek the early return of VT-SIC (B 737-400 aircraft currently at Dublin, Ireland). The aircraft had completed 'D' check with overhauled engines. Technically, the release said, the aircraft was almost in a brand new condition. Sahara Airlines had, meanwhile, spent over $4 million on VT-SIC. This, the release claimed, should fetch a high premium in the international market. Perhaps, ILFC had some `offers'. Hence, it sought to take repossession of VT- SIC.

The difficulty arose on April 13 when IFLC rushed to the Directorate General of Civil Aviation for repossession of B-737- 400 aircraft and feeding the matter to the press after arriving at a settlement. These actions were in violation of Article 30.2 of the lease agreement, the release said.

However, the misunderstanding between the two companies has been amicably sorted out and both parties ``look forward to an exciting future,'' it is stated.

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