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Canada Launches Probe into Flair Airlines’ Foreign Investor Control

The new Flair Airlines livery seen on one of the airline’s 737-400s. (Photo: Flair Airlines)

Following an extensive review of the distribution of board seats and foreign capital investment, the Canadian Transportation Agency moved forward with a second stage of an investigation that aims to clarify Flair Airlines’ compliance with laws that regulate foreign investor maximum share in an operator based in Canada.

Canadian law forbids for foreign capital to exceed 49 percent of total stake or 25 percent for an individual. 777 Partners, a Miami-based investment firm, stated that it reached that maximum share, but what’s being investigated is Flair’s board composition, as the US firm owns three of the five seats.

Flair was born in early 2021 and announced major expansion plans, aiming to reach a fifty aircraft fleet by 2025. Coincidentally, 777 Partners has leased at least thirteen of those aircraft, and was expected to participate in an incremental expansion that was announced last December.

According to The Globe and Mail, board composition and 777 Partners’ aircraft leasing agreements generate a conflict with the law, as main decisions for a Canadian operator are not being made by nationals.

The Globe and Mail cites John Gradek, a former Air Canada executive that states that «The mind of the organization has to be in Canada and Controlled by Canadians». For the Transportation Agency, evidence is sufficient to advance into a new investigative stage.

In a statement, the company defended itself: “Flair is completely compliant with all applicable airline regulations, including those dealing with Canadian control.”

The statement concludes by saying that “Flair is a private company, and while we have always and will continue to co-ordinate with all regulators as necessary, our shareholdings and financial affairs are confidential.”

It is not the first time that Flair is accused to be controlled by foreign interests: the company’s former finance director, Jocelyn Harris, filed a lawsuit for wrongful dismissal. Also, the company has an ongoing litigation with its largest Canadian investor, Prescott Strategic Investments.

Should the agency conclude that there is in fact a violation, the regulator can impose fines or suspend Flair’s AOC.

This article was written by Pablo Díaz for Aviacionline.

Parker Davis


  • Parker Davis

    Parker joined AirlineGeeks as a writer and photographer in 2016, combining his longtime love for aviation with a newfound passion for journalism. Since then, he’s worked as a Senior Writer before becoming Editor-in-Chief of the site in 2020. Originally from Dallas and an American frequent flyer, he left behind the city’s rich aviation history to attend college in North Carolina, where he’s studying economics.

    View all posts

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