flair airlines

Here are the latest updates on Flair Airlines' struggle to avoid shutting down

Depending on who they've booked with, Canadians with upcoming travel plans may be best to keep an eye on the unfolding situation with Flair Airlines, which it was revealed last week is at serious risk of shutting down.

The popular ultra-low-cost carrier is being investigated by the Canadian Transportation Agency after concerns that international investors have too much of a stake in the company.

The governing body concluded that Miami-based 777 Partners in particular has a "dominant influence" and excessive control over Flair's daily operations, which could mean a complete grounding of all of the brand's flights if it doesn't implement some major changes.

Under federal law, non-Canadian ownership of an airline must be 49 per cent at the very most, and no single non-Canadian group can own more than 25 per cent, along with other restrictions.

A domestic carrier must also be deemed to be "controlled in fact" by Canadians — the key issue in this case.

Because of the prominence of 777 Partners on Flair's Board of Directors, as well as the fact that all Flair's aircraft are owned by the investor, the CTA believes that Flair may not meet this third guideline.

The agency gave the company 60 days to rejig operations — which is up at the beginning of May — after which all operations would be suspended if nothing is changed.

Flair's CEO finally spoke out to clarify things this week, telling reporters that there is "zero chance" that it will lose its license to operate in Canada, and attributed the woes in part to COVID-19.

"We're responding to the concerns that the CTA has made... We've dealt with most of them already. So customers have no concerns," he said in a press conference on Thursday.

"All that remains is that we owe some debt to a shareholder who provided it to enable us to survive COVID, and all we're really asking for is time to refinance that debt."

As Flair asks for an 18-month extension before the CTA takes any action, competitors have spoken up to as that the grace period not be granted.

The National Airlines Council of Canada issued a scathing release on the subject on Tuesday, saying that "a dherence to existing laws regarding ownership and control-in-fact of major companies is an important principle to uphold" and that it is "entirely reasonable for Canadians to expect companies to comply with the clear and longstanding rules of the Canada Transportation Act."

"It is with this basic principle in mind that Canada's airlines are calling on the Government of Canada to reject Flair Airlines' request for an exemption under the Act," continues the organization, which represents carriers like Air Canada and WestJet. 

"If granted, this unprecedented request would allow Flair to continue operating outside the bounds of existing Canadian law, setting a troubling precedent while also threatening consumer confidence in the sector at a time when the travel industry is working hard to provide a strong and sustainable future for air travel for Canadians."

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