UK regional carrier flybe has accused maintenance provider Monarch Aircraft Engineering Limited (MAEL) of breach of contract by withdrawing its services.
The Exeter-based airline, which recently put itself up for sale, served a notice of termination on MAEL Nov. 27 after the latter had allegedly “unilaterally and in breach of our contract” halted services on flybe aircraft.
In a response Nov. 28, MAEL said that it “served notice on its contract with Flybe earlier this year.
“Due to circumstances we cannot disclose, we decided to suspend repair and maintenance operations for Flybe on 23rd November. Flybe subsequently terminated their contract with us on 27th November, 2018.”
MAEL provided Flybe with line and light maintenance services at Birmingham and Manchester airports.
The airline noted that “MAEL recently finished a complex restructuring exercise…and Flybe had been wholly supportive of MAEL throughout that process. Flybe are therefore very disappointed by these events, which appear to have been undertaken without due consideration of our business, customers and operations, and with no legal justification.”
The airline added that it had reassigned all maintenance operations to Flybe staff and contracted agencies over the weekend of Nov. 24-25, “without any adverse impact on Flybe operations or customers”.
Aviation Week Network's ATW understands that after MAEL had served notice on Flybe in June that it wanted to terminate their relationship, on the grounds that the existing contract was no longer fit for purpose. Discussions had been continuing between the two companies to hammer out a new agreement.
MAEL is understood to have been concerned by what it regarded as Flybe’s financial fragility and wished to limit its exposure to the airline. Flybe issued a profit warning in October that it anticipated making a loss of around £12 million ($15.5 million) for the full year, due to a combination of strong competition, currency fluctuations and higher fuel prices.
Flybe added on Nov.14 that it was in discussions with several parties over a possible sale of the company.
ATW understands that matters between the two companies came to a head after MAEL asked Flybe for earlier payment of invoices.