Saipan Air is exploring all legal options after its partner, Swift Air, which was supposed to provide the airplanes, backed out, claiming “financial incapability” among its reasons.

Steven P. Pixley, chief legal counsel and spokesman for Tan Holdings, told reporters yesterday that they received a cancellation notice from Swift Air on Sunday evening — one week before the official launching scheduled for July 1.

“Tan Holdings…negotiated with Swift Air in good faith and paid $1.26 million in security deposits. Swift Air promised to have the planes delivered in time for the July 1 operations,” Pixley said.

“Tan Holdings…invested heavily and we got the email on Sunday from Swift Air informing us that they are not financially capable of going on with the operations,” Pixley said.

He said this is now being investigated by the authorities.

“Basically, Swift Air did not perform its side of the contract and we have to postpone our operations. This development is a legal matter now and we are exploring our legal options,” Pixley said.

Swift Air was supposed to deliver three airplanes to Saipan Air for its operations — two Boeing 757’s and one Boeing 727.

Pixley said Saipan Air is preparing to file a complaint against Swift Air in the U.S. District Court for breach of contract, for the NMI for fraud, and misrepresentation.

He said Tan Holdings made two wire transfers to Swift Air — $900,000 on April 9 and $360,000 on May 29, 2012.

Pixley said last week, there were already concerns about finances so they pressed Swift Air to meet the launching target.

He said they were later notified in the notice of termination of contract that Swift Air could not acquire certification from the Federal Aviation Administration.

Pixley said Saipan Air is totally owned by Tan Holdings and the CNMI government is not a part owner.

He said they may have to find another partner but there are no definite decisions yet.

Saipan Air hired several employees who are now undergoing training, but Pixley said they now don’t know what will happen to these personnel.

Last month, Saipan Air was launched in China and Japan and Pixley said tickets had already been sold in Japan and China.

“Again, this is a developing issue and we don’t have any decisions yet. My client [Tan Holdings] is devastated with this development,” Pixley said.

According to its website, Swift Air is “one of the premier aircraft managers and operators in the United States with many years of experience operating a diverse fleet of business and personal jets. “Founded in 1997, Swift Air headquartered in Phoenix, Arizona “owns and operates a fleet of 737 airliners and other jets available for charter for corporate, family or group travel.”