Hell or high water: Commercial Court upholds payment obligation under COVID-era aircraft lease

12/12/25

In a judgment handed down on 12 December 2025, the Commercial Court has upheld the payment provision under an aircraft “wet lease” notwithstanding that, as a result of the Covid-19 pandemic, the aircraft was never operated and the necessary regulatory approvals for operations were never obtained.

A “wet lease” arrangement is one in which the lessor agrees to provide the aircraft, its crew, maintenance services, and insurance, while the lessor is responsible for matters such as ticketing and routing. Thus in effect the aircraft is operated by the lessor but under the lessee’s direction and under its livery. 

In December 2019, Just Us agreed to wet lease an Airbus A320 passenger jet to Corendon Airlines, for the exclusive use of Fibula, a tour operator who organised package holidays for customers based throughout the Balkans. Flights under the lease were due to commence on 1 April 2020 with the period from January to March being used to prepare for operations. Under the lease, which was governed by English law, Fibula agreed to be responsible for the lease payments notwithstanding that it was not the lessor, and paid the deposit on signing the lease.

In light of the declaration of the Covid-19 pandemic in mid-March 2020, Fibula purported to terminate the lease for force majeure and subsequently sued for the return of its deposit. Just Us counterclaimed for the outstanding lease payments. 

Fibula’s claim was summarily dismissed by HHJ Pelling KC on 2 March 2022, after which the only live claim remaining was Just Us’ counterclaim. Fibula’s principal defences were that its payment obligations were dependent on the satisfaction of two conditions precedent: that there be a “pre agreed successful audit” of the aircraft (the “Audit Defence”), and that Just Us obtain the necessary flight approvals from the Turkish authorities (the “Approvals Defence”). It contended that neither condition had been satisfied.

On the Audit Defence, it was common ground that the audit was a condition precedent to payment, as this was expressly stated in the lease. However, the Judge ruled that the true construction of the words “pre agreed successful audit” meant one which did not identify any issues preventing regulatory approvals being obtained; as the audit met this requirement, the condition had been satisfied. 

On the Approvals Defence, it was common ground that Turkish approval had not been obtained. However, the Judge held that on its true construction of the lease, this was not a condition precedent but rather that if the relevant approvals had not been in place by 31 March 2020,  no further performance of the lease would be required; crucially however this would not affect the parties’ accrued rights including Just Us’ right to full payment which accrued on completion of the audit. 

The judgment is a further example of payment provisions in aircraft leases being construed in favour of the lessor. That is generally the position in “dry” leases (where the lessor provides only the aircraft), where the payment obligation is commonly described as being binding “come hell or high water”, and while each lease will turn on its particular terms, it appears that a similar approach will also hold true in respect of wet leases.

A copy of the judgment can be found here: Fibula Air Travel v Just Us Air [2025] EWHC 3259 (Comm)