Flair Airlines is facing potential suspension or cancellation of its operating licence after the Canadian Transportation Agency found that it may not be controlled by Canadians and thus fail to qualify as a Canadian airline. The carrier has 60 days to respond.
Is Flair controlled by foreign investors?
On Sunday, 3 March, the Canadian Transportation Agency issued a preliminary determination expressing doubts as to whether Flair qualified as a Canadian airline. The Canada Transportation Act SC 1996 stipulates that an airline must be majority controlled by Canadians to be defined as a Canadian airline. The law states that foreign owners cannot control more than 49% of an airline collectively or more than 25% individually. Currently, Miami-based investment firm 777 Partners owns 25% of the airline, within the legal limit. However, the US firm also owns three of the five seats on Flair’s board, which has aroused suspicions.
According to data from ch-aviation.com, five of Flair’s 12 aircraft are leased by 777 Partners, almost half of their fleet. The board composition and leasing agreements generate a conflict with the law, as key decisions for the operator are not being made by Canadian nationals. 777 Partners are also backing the Australian low-cost startup Bonza, another ultra-low-cost airline set to begin operations this year.
What happens now?
The Canadian Transportation Industry has given Flair 60 calendar days to respond to its claims. Once the review process is over, the agency will issue a final public determination, with a conclusion and justifications of its findings. Once uploaded, this can be found on their website.
Flair CEO Stephen Jones said in a statement:
“Flair Airlines is a Canadian airline and is controlled by Canadians both in law and in fact. Flair Airlines, at all times, operates its business in compliance with the laws and regulations governing air transportation in Canada. Flair Airlines will fully cooperate with the Canadian Transportation Agency review and will respond to the Canadian Transportation Agency in a timely manner,”
What do you think the outcome of the investigation will be? Let us know in the comments below!