A group of five businesses and 21 Chinese tourists has filed a USD50 million racketeering lawsuit against XTRA Airways (Fort Lauderdale International), accusing the carrier of engaging in a fraudulent scheme by not taking appropriate steps to ensure the realisation of its published flight schedule between Saipan and China in 2017, the Saipan Tribune has reported.

11 of the 21 Chinese plaintiffs are passengers who were stranded in Saipan following the sudden termination of the Saipan services on November 4, 2017.

The defendants in the case include XTRA Airways' executives Frank J. Visconti, Nicolas Finazzo, and Andrew Lotter, as well as the airline's parent companies TEM Enterprises, AerSale (United States of America), and AerLine Holdings. A pilot, Carlton Conkling, is also listed as a defendant.

According to the lawsuit, one of the plaintiffs, Dream Pacific Aviation Services Hong Kong Ltd., entered, in March 2017, into a charter agreement with XTRA to operate one Boeing narrowbody between Saipan and destinations in China. The contract was later expanded to two aircraft and additional destinations in China. The remaining plaintiffs collaborated with Dream Pacific to provide lodging and food for the expected tourists arriving to Saipan.

However, the carrier has allegedly only provided a single B737-800 non-ETOPS certified aircraft unsuitable for the routes. Although XTRA Airways argued at that time that ETOPS certification is not needed as Iwo Jima can serve as an alternate airport, the plaintiffs allege that the Japanese airport is not suitable for such purposes. Furthermore, the lawsuit also alleges that XTRA Airways had been violating crew rest requirements.

XTRA Airways briefly operated from Saipan to both Nanjing and Tianjin between September 24, 2017, and November 4, 2017. It cancelled the services without prior warning after a mechanical failure on the B737-800s deployed to the route on November 4. It has never obtained route authorities for flights out of Saipan to each of Changsha Huanghua, Shenzhen, and Wuhan which were also covered by the contract with Dream Pacific.

In early December 2017, XTRA Airways returned all its rights for Northern Mariana-China routes.

The American carrier is now undergoing restructuring following the decision of AerLine Holdings to divest from XTRA Airways, announced in late March 2018. The airline is planning to lay off 164 staff members effective May 19 as a part of slimming down prior to the change of ownership.

"The claims made by Dream Pacific in the complaint are false and wholly without merit. Dream Pacific failed to honor its contractual commitments to XTRA Airways. XTRA Airways ultimately cancelled its agreement with Dream Pacific after XTRA Airways was not paid for the flights it was contracted to fly for Dream Pacific. XTRA Airways will file a response to the lawsuit with the US District Court at the appropriate time and will be claiming damages against Dream Pacific," XTRA Airways Director of Marketing has said in a statement to ch-aviation.