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Flair Airlines’ future in Canada remains up in the air until June 1

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Aviation watchdog now reviewing the discount airline’s response to foreign ownership concerns

Flair Airlines Ltd. could have its licence to fly in Canada suspended if the Canadian Transportation Agency determines its ownership is not Canadian. Photo by James MacDonald/Bloomberg

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Canada’s aviation watchdog says Flair Airlines Ltd. has responded to concerns raised in a preliminary investigation that found the discount carrier may have violated foreign ownership rules.

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The Edmonton-based discount carrier was facing a May 3 deadline to respond to the Canadian Transportation Agency’s (CTA) initial finding that Flair had failed to meet requirements for Canadian ownership of a domestic airline under the Transportation Act. “Flair has submitted a response…

The Agency is in the process of reviewing it,” CTA said in a release Wednesday. “The Agency will issue its determination on June 1st, 2022.” A panel assigned to Flair’s case will now review the airline’s submission and determine what the next steps will be for the embattled carrier. If it’s determined that Flair is not Canadian, CTA has said, the company’s licence to operate could be suspended.

Under the cloud of regulatory scrutiny, Flair Airlines has rolled out big promotional discounts and messaging aimed at reassuring customers that the company won’t be losing its ability to operate in Canada.

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A spokesman for Flair Airlines said this week that the airline is working closely with the CTA to resolve the matter. The company had previously said it was seeking a temporary exemption from federal ownership rules while it attempts to resolve some financial issues flagged by the aviation watchdog.

On May 3 — the deadline for the company to make its submission to CTA or face the potential loss of its licence — Flair unveiled a two-day sale offering deeply discounted seats under the promotional code: HERETOSTAY. Under the federal Transportation Act, at least 51 per cent of a domestic airline’s voting shares must be Canadian, and no more than 25 per cent of voting interests can be held by a single non-Canadian company or person.

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The CTA has specifically raised questions about 777 Partners LLC, a Miami-based private investment firm which holds a 25 per cent stake in Flair.

The investment firm leases planes to Flair and had control of its board of directors before the airline reconstituted the board in April and increased the number of directors from five to nine — only two of which were to be non-Canadian.

777 Partners also loaned the airline money to help it through the depths of the pandemic when air travel had all but ground to a halt. In its preliminary determination released in March, the CTA suggested that Flair’s dependence on 777 for financing was a strong indication that the airline was controlled by the investment firm. CTA wrote: “777’s influence over Flair may be dominant and that it, therefore, could be considered to have control in fact of Flair.”

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  1. Flair Airlines' future in Canada remains up in the air until June 1

    ‘Flair Airlines is here to stay,’ CEO assures passengers in fight to keep flying in Canada


  2. Flair Airlines' future in Canada remains up in the air until June 1

    Canada’s airline industry calls on Ottawa to reject Flair exemption

Flair CEO Stephen Jones went on the offensive on April 21 in a press conference where he slammed some of the company’s competitors who have publicly opposed the airline’s request for temporary exemption from ownership rules, calling them “Big Air” and accusing the legacy carriers of trying to reduce competition. “These guys have been ripping off the Canadian public for decades,” Jones said.

o Email: [email protected] | Twitter: mpotkins

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