CTA says it will issue determination on Flair Airlines on June 1

CTA says it will issue determination on Flair Airlines on June 1

TORONTO — Flair Airlines will be keeping a close watch on the calendar following the latest update from the Canadian Transportation Agency.

Flair met the CTA’s May 3 deadline for its response to the CTA’s March 2022 preliminary determination that called the ultra low-cost carrier’s operations into question.

Specifically, the CTA’s preliminary determination noted that Flair may not meet Canada’s requirements for Canadian ownership.

The CTA says it is now reviewing Flair’s response, and will issue its final decision on June 1.

That leaves the airline’s future hanging in the balance for a few weeks, however CEO Stephen Jones has consistently assured the airline industry and the travelling public that Flair isn’t going anywhere.

“Flair Airlines is here to stay,” said Jones at an April 2022 press conference, where he addressed speculation about the airline’s prospects after mounting coverage of the CTA’s review.

Foreign ownership in Canadian airlines can’t be higher than 49%. That percentage drops to 25% if the foreign investment is from one individual. There are also rules around foreign interests controlling a Canadian carrier.

777 Partners, based in Miami, owns 25% of Flair, and leases a number of aircraft to the airline. 777 Partners is also a lender. “Flair wasn’t part of the billions in bailout funding” that was provided to many of Canada’s airlines, Jones said last month. “Instead we turned to our shareholders to survive, and 777 Partners provided a lifeline to protect thousands of jobs from coast to coast.” He added that 777 Partners “has never used the fact that they were providing cash to exert day-to-day control.”

Flair had asked for an 18-month exemption to Canadian ownership requirements, to give the carrier time to refinance the balance of its debt to 777 Partners. Flair has already refinanced millions of dollars of its debt to the company.

The NACC, which includes Air Canada, WestJet and Air Transat, along with ATAC voiced their strong opposition to Flair’s 18-month exemption request. “Domestic control and ownership is not just a ‘nice to have’, it is a necessary underpinning of the system, and should be defended,” said the NACC in an April 2022 statement.

Flair spokesperson Mike Arnot told The Globe and Mail yesterday that the airline has made “significant concessions” regarding corporate finance and governance, in its May 3 response to the CTA’s preliminary determination. Arnot told the Globe that Flair’s investor base now includes more Canadians. The airline has also re-worked its debt to 777 Partners, to mitigate any concerns that the monies owed could be used as leverage to control the carrier.

Travel Week Logo

Get travel news right to your inbox!