Evergreen International Airlines sues Boeing in US federal court

EVERGREEN International Airlines has filed a US$175 million lawsuit against Boeing after the aircraft manufacturer allegedly reneged on a Dreamliner contract on which Evergreen depended for its income over 20 years.

McMinnville, Oregon-based Evergreen alleges Boeing terminated the contract in bad faith, then awarded it to rival Atlas Air and passed along proprietary Evergreen trade information in the process.

The lawsuit was filed in US District Court in Seattle and accuses Boeing with breach of contract, acting in bad faith and breaching confidentiality. Boeing had not responded at the time of the report in the Yamhill Valley, Oregon, News Register.

The suit alleged Boeing had no reason to be unhappy with Evergreen's performance. It alleged that New York-based Atlas got the contract in compensation for the $1 billion Boeing owes the company in penalty fees on a long-delayed aircraft order.

Boeing selected Evergreen to operate the Dreamliner large cargo planes in 2005 in a competitive bidding process. At the time, the lawsuit says, Boeing told Evergreen it looked forward to "a long-term working together relationship with the LCF [large cargo freighter] and 787 programme".

The contract specified "the period of performance under this contract may continue through an extended period of 20 years or the life of the 787 programme, whichever is shorter, and is subject to the completion of an initial term and the exercise of up to three consecutive five-year options to renew as indicated below," the lawsuit states.

It states Boeing had planned to begin operating its reconfigured Dreamliner cargo planes in August 2007, but there were numerous delays, and the planes did not actually make their first flight until December 2009.

"All the while, Evergreen stood by Boeing, sacrificing its own immediate profit for the overall success of the programme," the suit alleges. "Evergreen has developed a robust, reliable, global logistics system that is integral to the success of the Dreamliner programme and had every reason to believe that short-term sacrifice and collaboration with Boeing would be returned by a long-term and mutually beneficial relationship."

The lawsuit also states: "Beginning in the fall of 2009, Boeing secretly negotiated with Atlas to trade the Evergreen LCF contract for Boeing's enormous exposure to Atlas' refund claim based on late delivery" of another aircraft, the lawsuit charges. "At the same time," it alleges, "Boeing lied to Evergreen, asserting that it was merely conducting a review that was standard procedure, and rebuffed Evergreen offers to engage in a good faith appraisal of both parties' performance of the contract."

Evergreen also claimed: "Boeing further breached its contractual duties by misleading Evergreen into giving Boeing confidential and proprietary internal reports under the guise of budget forecasting." That violated confidentiality obligations expressly laid out in the LCF contract, the suit said.

(Source: www.schednet.com)