The New England Patriots Are suing Eastern Airlines over what it calls extortion for attempting to extract more money from the NFL Team in order to operate charter flights using the team’s Boeing 767 aircraft. Let’s take a closer look at the lawsuit.
Lawsuit: New England Patriots Sue Eastern Airlines
First, let’s look at the background. In 2017, the New England Patriots acquired two Boeing 767-300 jets for $10 million. The plan was to use those jets to transport the team around rather than having to pay every season for full charter service. In 2020, the Patriots entered into a dry lease agreement with Eastern Airlines to operate and maintain the 767s on its behalf for six NFL seasons: 2020-2021 though 2025-2026.
In a dry lease agreement, the air carrier is responsible for providing the crew and assumes full operational control of every flight. The air carrier is also typically responsible for paying the costs for maintenance, crew members, insurance, and other operating costs.
The agreement also allowed Eastern Airlines to use the Patriot’s 767 jets to conduct commercial or charter flights when not in use by the team and in exchange, Eastern agreed to pay the Patriots rent, which included a nominal fee, an hourly rental fee when the aircraft was in use, and the agreement to maintain the aircraft (though the Patriots contractually promised to compensate Eastern for all heavy maintenance, the replacement of engines, APU and landing gear and the accomplishment of all FAA airworthiness directives).
Finally, the contract also stipulated that the “owner shall be entitled to schedule the use of the Primary Aircraft for other such flights as it may request.” (one of the two 767 aircraft was designated as the “Primary Aircraft”).
In a July 7, 2023 letter, Eastern announced that it was “unable to honor that existing Dry Lease Agreement,” and it attached a new proposed dry lease agreement “whose economic terms were significantly more lucrative to Eastern,” according to the lawsuit filed by the Patriots.
A follow-up letter from Eastern explained, “As we have stated for the past few months to you both, Eastern Airlines is not able to support an agreement of this kind.” However, Eastern identified no unpaid invoices to support any unilateral termination right per the terms of the contract. That left the Patriots in a bind.
“If the [New England Patriots] did not pay Eastern more than provided for in the parties’ agreement, Eastern would simply walk away from the agreement, leaving the Patriots without an airplane operator on the eve of the upcoming NFL season, and with no plan in place to transport the Patriots’ sizeable contingent of players, coaches, and other personnel across the country.”
Suddenly without a charter operator, the Patriots contracted with American Airlines and refused to pay Eastern Airlines the higher fees it was seeking. Instead, Eastern Airlines was sued.
Why Did Eastern Airlines Breach Contract With Patriots?
Eastern Airlines has until October 25, 2023 to respond to the Patriot’s lawsuit, but we can read between the lines here. It sounds like Eastern vastly underestimated what it was getting itself into.
The Patriots are a sports team, not an MRO. It reasonably wanted to find a one-stop-shop that could operate and maintain its aircraft. Eastern Airlines answered that call and the contract between parties carefully spells out the rights and obligations of each side.
However, it appears that Eastern was not all that shrewd and agreed to a price at which it lost money. The contract does make the Patriots responsible for “fuel inflation” so it likely is not the fuel. My guess is that these older 767-300s have needed more routine maintenance (versus heavy maintenance) than Eastern bargained for and/or that the Patriots are using their aircraft more than originally anticipated.
In either case, the Patriots lay out a compelling case that Eastern breached its contract without grounds. I look forward to reading Eastern’s reply.
The reconstituted Eastern Airlines is a difficult airline to analyze. With grand aspirations but limited service, the carrier is more enigmatic than anything else. But here it appears that Eastern found it had cut a bad deal with the Patriots and tried to renegotiate when it had no contractual right to do so. Now it faces a $22.8 million lawsuit from the NFL Team.
(image: New England Patriots // H/T: One Mile At A Time)