If you follow the airline industry, you may have heard of 777 Partners, a Miami-based investment firm. The company was founded in 2015, and claims to be self-sufficient, not dependent on banks or third party investors.
Recently the company has been in the news for spending hundreds of millions of dollars buying football clubs (that’s soccer to us Americans). However, for those of us familiar with the airline industry, 777 Partners is probably best known for its stakes in two ultra low cost carriers, including Canada’s Flair and Australia’s Bonza. Furthermore, 777 Partners acquires jets on behalf of these airlines.
Well, the investment firm is being accused of doing some pretty shady things, which perhaps sheds some light on recent aircraft repossessions (thanks to @WandrMe for flagging this).
In this post:
777 Partners has had some Boeing 737 MAXs repossessed
In March 2023, Canadian ultra low cost carrier Flair had four of its Boeing 737 MAXs repossessed. The jets were owned by a leasing firm named Airborne Capital, and 777 Partners was reportedly on the hook for making those payments.
The circumstances surrounding this were unusual, since it’s not normal for an airline to have planes repossessed, aside from when there’s a dire financial situation. The leasing company claimed that payments for these Flair Boeing 737 MAXs had repeatedly been missed.
Flair’s CEO, meanwhile, claimed that the company was “several days” behind on a lease payment, but accused the leasing company of conspiring with competitors to take down the airline:
“We have come in and upset the cozy duopoly, and as a consequence people want us out of business. We do believe there were negotiations going on behind the scenes between one of the majors and the lessor to, you know, hurt Flair by offering above-market rates for the aircraft we have been leasing.”
“There are airlines out there that don’t want Flair to exist, and it doesn’t surprise me. We are a challenger to the status quo.”
I found this whole situation to be strange, and have been waiting for the other shoe to drop, since I figured there had to be more to this story. Were Flair and/or 777 Partners in such a dire financial situation that they couldn’t make a $1 million lease payment on jets to keep operating? Like I said, you don’t usually see jets repossessed from reputable airlines over lack of payment.
Well, the picture of what’s going on has just become a bit clearer…
How 777 Partners is reportedly profiting off of Flair & Bonza
Website Josimar Football has a fascinating investigation into 777 Partners. The website is dedicated to football, so the primary focus of the story is how 777 Partners has spent hundreds of millions of dollars buying up money-losing football teams. What business sense does that make, especially when the company is allegedly not taking any outside money (so it’s not like Saudi Arabia is investing for prestige)?
The story also has some very interesting claims about 777 Partners’ airline investments, so let’s start with those:
- Jocelyn Harris, Flair’s former VP of Finance, claims that Flair owed 777 Partners $129 million, and that loan came with an 18% interest rate (note that she has since filed a wrongful dismissal and harassment lawsuit against the company)
- Timothy O’Neil-Dunne, Flair’s former Chief Commercial Officer, has accused 777 Partners of fraud and breach of contract, also claiming that 777 Partners makes money from the airlines it owns stakes in by overcharging them for aircraft; 777 Partners reportedly buys 737 MAXs for $42 million, and then sells them to its own airlines for $52 million, realizing a $10 million profit per plane at the time of delivery
Again, these are just claims that haven’t yet been proven in court, but these are pretty major accusations. If true, 777 Partners is essentially setting its airlines up to fail, charging them $10 million over market for aircraft, and on top of that charging 18% interest rates.
Why would 777 Partners basically be trying to run its airlines into the ground? Well, according to an anonymous former 777 Partners employee, it’s all a shell game:
“All these businesses are losing money. Sport? Losing money. Aviation? Losing money. But who is going to take the loss? The joint venture partners. These guys play a shell-game. They claim to be self financed, to have put their own money into it. But they can’t have as much money as they say they have. It’s just not possible. But they don’t need a lot of money. Because what they really do is shunt money around. It’s a giant shell game. The same money is always out there doing something. And they are running it faster and faster.”
Let me emphasize that these are all just accusations, in some cases from anonymous sources, and in some cases from former employees. But this is only a small piece of the pie, and the story lays out quite a pattern. I’d recommend reading the full story, but just to hit on a few of the other topics mentioned:
- In 2003, the co-founder of 777 Partners, Josh Wander, was arrested when he was 21 years old for drug trafficking, as he opened a package containing 31.2 grams of cocaine being tracked by Drug Task Force agents; he claimed the cocaine was just for him and a friend, and he wasn’t trafficking it
- In 2009, Wander worked at a structured settlements company, but the company’s president ended up suing him, claiming that Wander “misappropriated confidential company information and trade secrets, and otherwise violated the terms of his employment agreement”
- In 2011, the Bellagio Las Vegas gave Wander $78,000 in credit, but had to sue him when he only paid back $5,000 before leaving, something that wasn’t paid back for many years
- In 2013, Amex closed Wander’s Centurion Card and sued him, as he owed over $245,000
- Even to this day unpaid bills seem to be a thing, and in a lawsuit filed in 2022, 777 Partners and some other subsidiary companies are accused of defaulting on a $60 million loan taken out almost 18 months prior
There’s a lot more to this, but I think the above paints a pretty good picture of what’s going on here. I think the company deserves the benefit of the doubt with each of these individual issues, but I also can’t help but feel like where there’s smoke, there’s fire.
If the details contained in the lawsuit about 777 Partners’ investment in Flair are correct (777 Partners is pocketing $10 million on each 777, and is charging 18% interest on loans to its own airlines), then one has to wonder how much longer Flair and Bonza will be in business.
Bottom line
777 Partners owns stakes in Flair and Bonza, two ultra low cost carriers. Flair recently had some 737 MAXs repossessed over lack of payment, which left many of us scratching our heads. It seems that we now have a better sense of what might be going on, and it’s not a great sign of what the future may hold for these airlines.
What do you make of this 777 Partners story?
type Josh Wander into miami dade civil court records. He's currently being sued by Randy Gelber for $150k for back rent and trashing his leased apartment. I've known the guy since he was 10 years old. A complete con artist, always in debt. I guess he just finds more suckers to scam
You wrote that there are a lot more informations about Joshua Wander.
Do you have any idea how and where Joshua Wander and Steven Pesko met each other?
These guys have a mysterious connection. A bon vivant and a reputable banker, separated by a significant age difference. Is there any background information on this?
Why are the airlines paying so much over market in the first place? Makes no sense
Good piece and information. Thanks. What's missing is a comparison to other airline startups. There is no room here for that but do you think American European or Asian airlines get started by people who work three jobs and set money aside? Look closely at investment firms , start digging and you might find a lot of dirt. In this case your conclusion is likely wrong. When you start a business money is made when...
Good piece and information. Thanks. What's missing is a comparison to other airline startups. There is no room here for that but do you think American European or Asian airlines get started by people who work three jobs and set money aside? Look closely at investment firms , start digging and you might find a lot of dirt. In this case your conclusion is likely wrong. When you start a business money is made when you go public. It's possible they're overcharging on airplanes. It's possible they make money other shady ways. If it is legal then it is legal. But to make real money you start an airline put Network in place and go public. They couldn't make millions on interest but they could make billions on IPO
What's the point in sharing this news? It does not affect my points and miles or travel strategy/experience.
As someone who has experience with South Florida fraud, I've scratched my head in disbelief of the expansion of 777 in such a short time. I just don't see how Wander and Pasko could self-fund deals at these numbers; they don't have the kind of scratch that's been bandied about. Heck, I've heard what I consider credible rumors that Wander was just in the past few years borrowing money on a personal level at obscene...
As someone who has experience with South Florida fraud, I've scratched my head in disbelief of the expansion of 777 in such a short time. I just don't see how Wander and Pasko could self-fund deals at these numbers; they don't have the kind of scratch that's been bandied about. Heck, I've heard what I consider credible rumors that Wander was just in the past few years borrowing money on a personal level at obscene rates to fund his lifestyle. One way or another, we'll find out in the next few years what's real or not.
Thee guys are Ndrangheta Mafia straight up they own the Airline industry in Australia and also aircraft financing businesses in Australia they own Air Services and CASA and the whole helicopter industry so this is no surprise to me they are filth
That's a stretch. For starters Air Services and CASA are government.
Yep
They don’t in fact do anything like that in Australia
Flair CEO was bang on when he said the cozy Canadian airline duopoly really does not want him or his airline around. Both pose a BIG threat.
During 2022 Christmas meltdown I flew 4 segments on Flair (extremely cheap) within Canada and to Mexico and it was on time on all flights, while almost all flights (costing like 10x of Flair fares) on other airlines were severely delayed, or cancelled stranding thousands of passengers. So I don't know what shady things they are doing with the money, but the actual operation of Flair is impressive.
777 Partners recently launched an aviation affiliate called AIP Capital whose principal, Jared Ailstock, was fired from Goldman Sachs over falsifying expense reports and got barred from FINRA. Ailstock failed to mention this little detail to his following employer, Castlelake Aviation, which also resulted in him getting fired. This is public record and well known in the aviation leasing community, despite Ailstock's pathetic and desperate attempts to clean up his image through charity. These people...
777 Partners recently launched an aviation affiliate called AIP Capital whose principal, Jared Ailstock, was fired from Goldman Sachs over falsifying expense reports and got barred from FINRA. Ailstock failed to mention this little detail to his following employer, Castlelake Aviation, which also resulted in him getting fired. This is public record and well known in the aviation leasing community, despite Ailstock's pathetic and desperate attempts to clean up his image through charity. These people do not have any sense of personal integrity.
https://www.investmentnews.com/finra-bars-ex-goldman-banker-over-expense-report-205005
Well said Mario Rivera @ Fortress Investment Group!
I’m not saying that 777 is not shady, but I love how everyone is always convinced there is a scam involved. Why would the idiot management teams of Bonza and Flair agree to buy a $42mm plane for $52mm and/or borrow money at 18%? Sounds like some sour grapes from them…..or they are morons.
" Why would the idiot management teams of Bonza and Flair agree to buy a $42mm plane for $52mm and/or borrow money at 18%? "
Because 777 employed them, this lease arrangement is nothing new, maybe just a little more amped than usual. Profit shifting (bleeding) until it goes broke with any debt likely to be workers and service providers to the company.
A "business model" to make trump, desantis, and republicans proud of...
Yet you probably scream "girl power!" at our former Democratic Speaker of the House, who refused to take action against members of either party for millions in insider trading, despite open/outward (and more importantly: unrefuted) claims BY HER OWN CAUCUS against specific Congresspersons AND HER OWN FAMILY for doing so.
I swear, you hyperpartisan freaks (on either side) will be the end of this country.
@Heathrow_LHR Your response to hyperpartisanship is to go on some irrelevant, partisan political rant? Fascinating.
@Pudu, so in your carelessness, you missed those parts about "members of either party" and "on either side," or are you just too stupid to know what partisanship actually signifies? Which is it?
Bonza in italian slang means Cocaine! Nice choice
I smell a money-laundering Ruski !
You probably need to understand what money laundering is. They’re not trying to wash money here.
Something living rent free in my head can't stop shouting Timothy O’Neil-Dunne.
Timothy O’Neil-Dunne.
Timothy O’Neil-Dunne!!
Can't make this fluff up.
Delta Air Lines has joined the conversation.
For those who don't know the context to this, Tim Dunne is listed as a "Operating Partner at 777".
It's actually Tim Dunn, Fluff Partner at chatGPTim.
Last seen living rent free all over the internet.
This sounds very much like a money laundering operation.
No, a money laundering operation would be sure to have enough money to pay for the planes to keep outsiders from checking their books. This is a Ponzi scheme.
@Ben,
I heard a lot of the funding for Global Airlines came from Miami… hmm interesting
Article needs more research. Who are other management of 777? Where is the company registered? Who is the listed agent for the company? What is the history of the company? How does the leasing cost compare with major leasing companies?
@ derek -- The company is registered in Miami, but has subsidiaries all over the place. You can read about the company's management and alleged history directly on the company's website, 777part.com.
Seems like 777 is a minority owner of Flair, owning 25%. It doesn't seem like they have control over Flair. They are a majority owner for Bonza, however. It is theoretically possible that they could benefit if Bonza overpays for 777 owned aircraft but I have no knowledge if that is actually happening.
If 777 is buying football clubs on the cheap, it could be a way to make money because the general public...
Seems like 777 is a minority owner of Flair, owning 25%. It doesn't seem like they have control over Flair. They are a majority owner for Bonza, however. It is theoretically possible that they could benefit if Bonza overpays for 777 owned aircraft but I have no knowledge if that is actually happening.
If 777 is buying football clubs on the cheap, it could be a way to make money because the general public usually doesn't buy stakes in that industry. I am wary of the profitability of airlines like Flair and Bonza, though.
Hi Ben,
Great article as always. Just a small typo. You had ‘usual’ instead of ‘unusual’. Thanks for all the great work you do! Keeps me sane during the day job :)
@ DMG -- Thanks for the correction, and thanks for reading and for the kind words, I appreciate it! :-)