The furst question is why are they renegotiating a lease on aircraft that were only recently delivered and why would the lessor issue a demand letter during those renegotiations?  Possible scenario = Island Air is delinquent on their lease payments.  They were trying to negotiate a better deal and/or a way to cure the delinquency.  Lessor becoming skeptical of  the future of Island Air as a going concern pulls the plug on the whole deal and wants is aircraft back.  Dark clouds over Island Air.  You know what they say about the airline business, it makes millionaires out of billionaires.