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Canadian Carrier Flair Airlines’ Ownership Row Escalates
The ownership row over Canadian ultra-low-cost carrier Flair Airlines escalated this week with the issuing of a joint statement by two major industry bodies. The National Airlines Council of Canada and the Air Transport Association of Canada are calling on the Canadian federal government to reject the Edmonton-based airline’s request for an 18-month extension to address ownership concerns.
In the statement the two organizations that represent Air Canada, WestJet, Air Transat and a number of other airline operators and aviation industry suppliers stated: “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.”
As reported last month, Canadian law forbids foreign capital to exceed 49 percent of the total stake or 25 percent for an individual. 777 Partners, a Miami-based investment firm, stated that it reached that maximum share, but what is being investigated is Flair’s board composition, as the US firm owns three of the five seats.
The joint statement also alluded to the fact that if Flair is found to have breached the ownership it may lose its license to operate. The statement reads: “By failing to comply with basic, longstanding Canadian ownership and control rules, Flair places considerable uncertainty on the shoulders of travelers, potentially leaving them stranded without a backstop should Flair fail to abide by Canadian ownership and control requirements, as ordered by the Canadian Transportation Agency.”
The row has understandably provoked concern by airline customers and Flair Airlines has been seeking to offer reassurance ahead of the busy summer season. Recent marketing messaging on social media has alluded to the investigation with slogans such as ‘We’re here to stay so you can go’ and ‘We’re not going anywhere, but you can (for less).’
In a pinned tweet the airline makes a direct statement ‘We’ve read the news, and the comments and we understand the sentiment caused by the media. We are a Canadian airline that will be here for years to come.’
In a statement responding to the joint statement, the Financial Post cites Flair Airlines’ chief executive officer Stephen Jones as stating, “Air Canada deployed anticompetitive practices against WestJet and WestJet borrowed from Air Canada’s playbook to launch anticompetitive practices against Flair Airlines. Today, they are teaming up to protect their high fares, which is great for them but not for Canadian families. Without Flair, Canada has some of the highest airfare in the world.”
Flair Airlines have until 3 May to respond officially to the Canadian Transportation Agency (CTA) if the 18-month exemption is not granted by the federal government. In a press conference held on Thursday, Mr. Jones opened with the statement that the airline is ‘here to stay.’ He further added that the airline will meet the deadline in its response to the CTA and there there was ‘zero chance’ that the airline will lose its license on 3 May and customers should be confident in booking with Flair.
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