Originally published in Air Cargo World
Evergreen International Airlines is suing Boeing for $175 million for breach of contract.
In Dec. 2005 the McMinnville, Ore.-based company won a contract from Boeing to operate and maintain the 747 Large Cargo Freighter "Dreamlifter” fleet.
The four specially modified aircraft are used to transport major components of the 787 Dreamliner from Italy, Japan, South Carolina and Kansas to Everett, Wash., for final assembly.
In its complaint filed in a Seattle court on April 1, Evergreen alleges Boeing has “committed bad faith and breached its contractual promises to conduct its business fairly, impartially, and in an ethical and proper manner when it wrongfully canceled its long-term LCF contract with Evergreen and entered into a secret replacement deal with Atlas Air for the purpose of offsetting Boeing’s nearly billion-dollar liability to Atlas resulting from delays on the B747-8 program.”
After losing out to Evergreen in 2005, last month Atlas announced that Boeing had selected the company to operate the Dreamlifter fleet “toward the latter part of 2010” in a nine-year agreement.
“We look forward to working closely with Boeing and to providing world-class Dreamlifter service. Our dynamic customer solutions and our ability to integrate with our customers’ operations set us apart from other participants in the aircraft operating solutions market,” William Flynn, president and CEO of Atlas Air Worldwide Holdings, said. Flynn added that Atlas expects first deliveries of 12 B747-8 freighter aircraft in 2011.
Evergreen alleges that in the autumn of 2009 “Boeing secretly negotiated with Atlas to trade the Evergreen LCF Contract for Boeing’s enormous exposure to Atlas’s refund claim based on late delivery of the 747-8 freighter airplane."
The company goes on to say that "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 LCF contract.”
In its court filing Evergreen claims Boeing misled the company into providing “confidential and proprietary internal reports – under the guise of ‘budget forecasting’ – which Boeing instead gave to Atlas in violation of Boeing’s express confidentiality obligations under the LCF contract.”
While acknowledging that the LCF deal allowed for cancellation by either party, Evergreen claims this was subject to an explicit “covenant of good faith and fair dealing” with the inclusion in the contract of Boeing’s code of conduct that stated in part: “Employees will not engage in conduct or activity that may raise questions as to the company’s honesty, impartiality, reputation or otherwise cause embarrassment to the company.”
In addition to compensation and costs, Evergreen wants the Seattle court to ensure it has no obligation to participate in transition efforts with Atlas or provide Boeing with confidential information and data relating to the LCF program.