Lease of Aging Planes Leading to Lawsuits

Also in Chicago, on Jan. 19, the families of 26 people killed in a 2004 plane crash in Indonesia filed a lawsuit against Chicago-based plane manufacturer Boeing Co., alleging that the 20-year-old plane, on lease from the United States to an Indonesian budget carrier, was defective by design. Hilmar v. Boeing, No. 06 L 630 (Cook Co. Ill., Cir. Ct.).

In Arkansas, a lawsuit was filed in October 2005 over the deaths of 141 people killed when an Egyptian airliner ' also on lease from the United States to a startup airline company ' crashed into the Red Sea. The suit alleges that the leasing company knowingly sold a plane to a Third World startup carrier that had little training or experience in aviation matters. Siddi v. Ozark Aircraft Systems LLC, No. 05-5170 (W.D. Ark.).

'We see this as a growing problem,' said Gerald C. Sterns, who is handling the Philippines crash lawsuit in Chicago. 'What they're doing is putting aging aircraft that are maintenance-intensive into the hands of Third World airlines that do not have the capabilities to take care of them. This is a formula for disaster.'

Calls for Improvement

Jim Hall, former chairman of the National Transportation Safety Board and now principal at Hall & Associates, a Washington, DC, consulting firm, recognized the problem of old U.S. airplanes winding up in Third World countries. Hall is calling on the Federal Aviation Administration ('FAA') to work with the International Civil Aviation Organization ('ICAO'), a regulatory body, to address the problem.

'As we see the increased use of U.S.-manufactured aircraft in Third World countries, it is incumbent upon the FAA to work closely with ICAO to raise system safety and standards in these nations,' said Hall, also of counsel to the Nolan Law Group in Chicago, a plaintiffs' firm that concentrates on aviation litigation.

In the case of the Philippines airplane crash, Sterns, of Sterns & Walker in Oakland, CA, spent nearly 3 years fighting over jurisdiction before recently winning his fight to try the case in Chicago.

The suit alleges that that AAR Parts Trading Inc., a Chicago aviation company, is responsible for the crash because it allegedly knowingly leased an old and unsafe Boeing jet to a Philippines airliner.

'This is an airplane that never should have been taken from the Arizona desert graveyard and … put back into service, anywhere,' said Sterns, noting that the defense tried several times to get the case moved to the Philippines. 'We got the Illinois Supreme Court to say, 'No way. This case is going to trial in Chicago, not Manila.” Layug v. AAR Parts Trading, 216 Ill. 2d 690 (Ill. Sept. 29, 2005).

AAR's attorney, Gary Westerberg of Lord, Bissell & Brook in Chicago, denied any wrongdoing by AAR, maintaining: 'There was nothing wrong with the aircraft and the crash was caused by pilot error.' Westerberg also denied allegations that the commercial jet ' a 22-year-old former Southwest Airlines plane ' was 'dumped' in the Philippines.

'I would disagree that something was dumped on anyone,' Westerberg said. 'Obviously this was an older aircraft that was less expensive to lease than a new one. But aircraft of this vintage are being operated through the world safely.'

But they're also ending up in the hands of untrained pilots and novice mechanics in poor countries, alleged Tom Ellis, spokesman for the Nolan Law Group. The firm is handling the two lawsuits in Chicago and the Arkansas suit.

Ellis noted that a key issue in the Egyptian air crash was that the pilots encountered a flight-control problem that they weren't trained to deal with when the plane crashed into the Red Sea.

'That's really the crux of it,' Ellis said. 'What are these American lessors doing to ensure that the people they are entrusting their aircraft to know how to operate them safely?'

Boeing officials in Chicago and Seattle declined to comment.

Tresa Baldas is a staff reporter for The National Law Journal.

A growing number of lawsuits are alleging that aviation companies are dumping old and unsafe airplanes on Third World countries.

Some of the suits charge the companies with leasing planes to startup airlines that lack proper training to operate them safely.

In Chicago, a lawsuit is set to go to trial against an Illinois aviation company alleging that it knowingly leased an old and defective plane to a company in the Philippines, where the 22-year-old plane crashed in 2000, killing 131 people. Layug v. AAR Parts Trading, No. 00 L 9599, et al. (Cook Co., Ill., Cir. Ct).

Also in Chicago, on Jan. 19, the families of 26 people killed in a 2004 plane crash in Indonesia filed a lawsuit against Chicago-based plane manufacturer Boeing Co., alleging that the 20-year-old plane, on lease from the United States to an Indonesian budget carrier, was defective by design. Hilmar v. Boeing, No. 06 L 630 (Cook Co. Ill., Cir. Ct.).

In Arkansas, a lawsuit was filed in October 2005 over the deaths of 141 people killed when an Egyptian airliner ' also on lease from the United States to a startup airline company ' crashed into the Red Sea. The suit alleges that the leasing company knowingly sold a plane to a Third World startup carrier that had little training or experience in aviation matters. Siddi v. Ozark Aircraft Systems LLC, No. 05-5170 (W.D. Ark.).

'We see this as a growing problem,' said Gerald C. Sterns, who is handling the Philippines crash lawsuit in Chicago. 'What they're doing is putting aging aircraft that are maintenance-intensive into the hands of Third World airlines that do not have the capabilities to take care of them. This is a formula for disaster.'

Calls for Improvement

Jim Hall, former chairman of the National Transportation Safety Board and now principal at Hall & Associates, a Washington, DC, consulting firm, recognized the problem of old U.S. airplanes winding up in Third World countries. Hall is calling on the Federal Aviation Administration ('FAA') to work with the International Civil Aviation Organization ('ICAO'), a regulatory body, to address the problem.

'As we see the increased use of U.S.-manufactured aircraft in Third World countries, it is incumbent upon the FAA to work closely with ICAO to raise system safety and standards in these nations,' said Hall, also of counsel to the Nolan Law Group in Chicago, a plaintiffs' firm that concentrates on aviation litigation.

In the case of the Philippines airplane crash, Sterns, of Sterns & Walker in Oakland, CA, spent nearly 3 years fighting over jurisdiction before recently winning his fight to try the case in Chicago.

The suit alleges that that AAR Parts Trading Inc., a Chicago aviation company, is responsible for the crash because it allegedly knowingly leased an old and unsafe Boeing jet to a Philippines airliner.

'This is an airplane that never should have been taken from the Arizona desert graveyard and … put back into service, anywhere,' said Sterns, noting that the defense tried several times to get the case moved to the Philippines. 'We got the Illinois Supreme Court to say, 'No way. This case is going to trial in Chicago, not Manila.” Layug v. AAR Parts Trading , 216 Ill. 2d 690 (Ill. Sept. 29, 2005).

AAR's attorney, Gary Westerberg of Lord, Bissell & Brook in Chicago, denied any wrongdoing by AAR, maintaining: 'There was nothing wrong with the aircraft and the crash was caused by pilot error.' Westerberg also denied allegations that the commercial jet ' a 22-year-old former Southwest Airlines plane ' was 'dumped' in the Philippines.

'I would disagree that something was dumped on anyone,' Westerberg said. 'Obviously this was an older aircraft that was less expensive to lease than a new one. But aircraft of this vintage are being operated through the world safely.'

But they're also ending up in the hands of untrained pilots and novice mechanics in poor countries, alleged Tom Ellis, spokesman for the Nolan Law Group. The firm is handling the two lawsuits in Chicago and the Arkansas suit.

Ellis noted that a key issue in the Egyptian air crash was that the pilots encountered a flight-control problem that they weren't trained to deal with when the plane crashed into the Red Sea.

'That's really the crux of it,' Ellis said. 'What are these American lessors doing to ensure that the people they are entrusting their aircraft to know how to operate them safely?'

Boeing officials in Chicago and Seattle declined to comment.

Tresa Baldas is a staff reporter for The National Law Journal.