In response to a lawsuit alleging Surf Air failed to pay its former operator, the small-aircraft, members-only airline operating flights in and out of the San Carlos Airport is calling its former business partner a disgruntled vendor whose leaders attempted to oust the airline’s management and take over the company, according to a counterclaim filed Thursday with the U.S. District Court in the Southern District of New York.

In outlining allegations Encompass Aviation, the former operator of a fleet of eight Pilatus PC-12 aircraft, filed a lawsuit against Surf Air prematurely and publicized it in a campaign to smear the airline and extort a quick settlement, the airline is asking the court to consider throwing out the company’s claims and require its former operator to return attorneys’ fees and other damages related to Encompass Aviation’s operations and lawsuit, according to the counterclaim.

Filed with the same court June 19, the former operator’s suit came just days after Surf Air sent a letter terminating its contract with Encompass Aviation late in the evening of June 15 more than a year after they signed a contract to work with each other. Encompass Aviation alleges the unexpected termination came after months of failed promises Surf Air would make good on overdue payments totaling an estimated $3.1 million, according to its suit.

But the airline claims it was within its right to terminate the contract, noting the former operator’s high turnover in pilots and employees disrupted the airline’s schedule and the company submitted untimely and inaccurate records of its costs, according Surf Air’s counterclaim.

Surf Air also claims the former operator interfered with the airline’s third-party financing contracts and failed to return its aircraft after their contract was terminated. Surf Air is a commuter airline that offers unlimited flight service for a fixed monthly fee.

The claims come at a time when a cross-jurisdictional working group, including the Federal Aviation Administration, elected officials, San Carlos Airport staff and Surf Air representatives are exploring noise mitigation measures in response to complaints from residents of San Mateo and Santa Clara counties about noise emanating from the general aviation airport in recent years.

In shifting operations to another Southern California-based company, Advanced Air, the airline is hoping the combination of Surf Air’s business model and its new operator’s expanded capacity will promote scalability, said Surf Air’s Executive Chairman Sudhin Shahani in a press release.

“Surf Air continues to grow and prove itself, and our collaboration with Advanced Air brings especially exciting benefits to our members,” Shahani said in the release. “We look forward to resolving the Encompass matter in due course and are undeterred in our mission to provide a superb and unique travel offering for our members.”

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