Evergreen sues Boeing over Atlas ‘conspiracy’

EVERGREEN is suing Boeing over the abrupt cancellation of its contract to operate the Dreamlifter.

“Boeing committed bad faith and breached its contractual promises to conduct its business fairly, impartially and in an ethical and proper manner,” Evergreen claims. “Boeing’s bad faith and breach of contract have caused lost profits to Evergreen in excess of US$175 million.”

Boeing has thus far refused to comment.

Boeing unexpectedly chose not to renew Oregon-based Evergreen’s five-year contract to operate the manufacturer’s four 747-400 Dreamlifters last month. It instead awarded the contract to New York-based Atlas Air for nine years starting in September.

Boeing chose Evergreen in 2005 and even up to the New Year, according to Evergreen’s chairman, Tim Wahlberg, Boeing was happy with its service and had given no hint to suggest that the contract review would be anything but routine.

“We were on time all the time. We ran a perfect operation,” says Wahlberg. “We’re very price-competitive. We believe [the switch] was unrelated to our operation. We’re really disappointed that Boeing hasn’t come clean on what the deal is. It hurts our reputation.

“We don’t know the facts. We thought it would be nice if Boeing would have explained the facts to us. I don’t know what to say.”

In fact, Evergreen now alleges that Boeing transferred the contract as compensation to Atlas because of the delayed delivery of 12 747-8 freighters that Atlas has on order. The compensation would have cost Boeing nearly US1$ billion.

“Boeing dropped Evergreen in favour of Atlas to avert the multi-million dollar disaster that was looming over the 747-8 program,” Evergreen says. “Atlas has 12 747-8 freighters on order, with options for another 14. A Boeing employee informed an Evergreen employee that Boeing’s liability for penalties to Atlas approached $1 billion. By at least October 2009, Atlas had made a claim with Boeing for refunds resulting from Boeing’s failure to meet delivery guarantees to Atlas.

“Beginning in the fall of 2009, Boeing secretly negotiated with Atlas to trade the Evergreen contract for Boeing’s enormous exposure to Atlas’s refund claim based on late delivery [of another airplane],” the company claims.

“At the same time, Boeing lied to Evergreen, asserting that it was merely conducting a review that was standard procedure, and rebuffed Evergreen’s offers to engage in a good faith appraisal of both parties’ performance of the LCF Contract.”

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