Flair Airlines Gets Its Canadian Seal of Approval

DALLAS - The Canadian Transportation Agency (CTA) has announced its final ruling concerning Flair Airlines (F8): the airline is officially Canadian.

The carrier has faced some issues with the CTA during the last two months. The regulator conducted an investigation to make sure the F8 met the regulations regarding foreign ownership of a Canadian airline.

For an airline to be registered as Canadian and to get licenses to fly domestically and internationally from Canada, it must be a company "controlled in fact by Canadians and of which at least 51% of the voting interests are owned and controlled by Canadians," as defined by the Canada Transportation Act.

The regulator was concerned by the role of 777 Partners, an American company that has an almost 25% stake in the airline. 777 Partners also leases aircraft to F8 and has seats on the carrier's board of directors. The CTA said F8 had to prove it was Canadian before the deadline of May 3, 2022.

FLair's answers to CTA

Before the deadline, the Canadian low-cost carrier took actions to increase its Canadian ownership of the airline. The airline amended its unanimous shareholder agreement and decreased the number of 777 Partners' seats on its board of directors to less than half of the board quorum. The board members must also be appointed by Canadian shareholders.

The CTA seems to have accepted these answers, as the regulator's final decision was released today. The CTA confirmed in a press release, "After considering all of the facts, the Agency found that Flair addressed the concerns raised in its preliminary determination."

The CTA was indeed satisfied by F8's amendments to the shareholders' agreement and its rules on the composition of the board of directors. Moreover, the CTA was satisfied by the airline's financial results, saying the low-cost carrier "has demonstrated it can generate positive cash flow from operations, alleviating concerns it would be dependent on 777 for additional new financing."

Executives Comments

At the press conference today, F8's President and CEO Stephen Jones said "It’s a fantastic day for team Flair," as the airline was officially approved as Canadian, bringing to an end this investigation. He explained that the company has always been confident it was Canadian, and the CTA's decision just confirmed it.

He indeed declared, "Though we never doubted it, we’re thrilled to receive the positive decision today from the CTA, which reinforces that Flair is a Canadian airline. The question has been answered. It’s done."

The CEO explained the work the airline had to do with the CTA "to address all of the concerns that they raised with us about our position — some governance-related concerns, some finance-related concerns, and we’ve gone through line by line and addressed those."

He then said the airline will continue its expansion as a low-fare carrier: "The strategy stays the same, there’s nothing that’s changing here. All that has changed is that the uncertainty about our status as Canadian has been removed."

Flair operates many routes in the domestic market but has also started flying internationally to the United States and Mexico. The airline is gaining importance, as it is the eighth biggest carrier on flights between the US and Canada, compared to the seat offer this month, according to airlinedata.com.

The airline says it is satisfied by the decision of the CTA to officially recognize it as Canadian, which gives it more confidence in its future development and the ability to continue to provide Canada with the "lowest fares in the country."

Featured image: Flair Airline operates 14 Boeing 737 aircraft, including 737-800NG and 737 MAX 8 aircraft. Photo: Daniel Gorun/Airways