DALLAS - The Canadian Transportation Agency (CTA) is conducting an investigation into Canadian ultra-low-cost carrier Flair Airlines (F8). The investigation is to address whether the airline meets the regulations regarding foreign ownership of a Canadian company.

Yesterday, CEO Stephen Jones held a media press conference addressing the CTA findings and committing to the public that "Flair will continue to fly; Flair customers can continue to book our everyday low fares with confidence."

On March 3, the Canadian Transportation Agency (CTA) issued a preliminary ruling that found the airline "may not be controlled in fact by Canadians and may, therefore, not be 'Canadian,' as defined in the Canada Transportation Act."

The 777 Partners Investment

The airline announced today they intend to respond to the CTA by the May 3rd deadline, presenting the agency with changes made to the company's operation in line with the issues in question. The airline will however have one outstanding issue that requires further attention which they have requested an extension for from the Minister of Transportation.

The main focus of the investigation focuses on 777 Partners' investment and role within the company. The American-owned firm leases several aircraft to F8 and has several more on order destined for the airline. Jones noted that the unanimous shareholders' agreement was not clear enough when depicting the Canadian levels of control.

The unanimous shareholder agreement from 2018 has now been amended to show the Canadian stake of ownership. Jones noted that "the CTA has confirmed to Flair that these amendments address all of the corporate governance concerns that it has raised." As part of these changes, F8 increased the number of seats on their board from seven to nine, and reduced the number of 777 Partner-appointed seats to two.

Flair now has seven Canadians sitting on its board.

Like many other airlines, the COVID-19 pandemic seriously affected F8's economic standing. The company was not part of several bailouts provided by the federal government to major airlines, including WestJet (WS), Air Canada (AC), and several others. Instead, the airline received financial support from 777 Partners to remain stable and maintain employment of staff across the country.

Canadian IPO?

This debt was addressed as a concern by the CTA in their investigation. F8 has asked for an 18-month extension from the Minister in order to pay back this debt. Jones made it clear that F8 is now once again cash self-generating and requires no further loan support from 777.

Stephen Jones also noted that as F8 looks to strengthen its standing within Canada, they are indeed looking into going public with the company on the Toronto Stock Exchange in the near future. This move would be significant for the company and strengthen its Canadian standing. When asked about a timeline for the intended move, Jones said that they would keep an eye on the market and attempt to launch sooner rather than later.

Flair Airlines is still receiving aircraft from Boeing, and noted that they still expect delivery of aircraft to meet their goal of 28 in the fleet by the end of the summer and are on track to meet their F50 goal by 2025. F8 currently leases aircraft from 777 Partners, and other lessors in the United States and Ireland.

When asked about what Jones would say to the general public and consumers concerned about F8 losing its operating certificate, he said, “Flair is here to stay.” Jones added that customers should not be concerned about traveling with the carrier. Consumers can be confident that F8 will continue to provide Canadians with the lowest possible fares across the country.

Featured image: Michal Mendyk/Airways