CEO says Flair Airlines meets federal rules as it works to repay debt owed to U.S. shareholder
The CEO of Flair Airlines argued on Thursday the Edmonton-based company meets federal regulations amid a review by the Canadian Transportation Agency.
On March 3, the CTA raised concerns about the possibility that Flair Airlines' Canadian shareholders did not have full control of the company and that shareholder 777 Partners, based in Miami, Fla., exerted too much power.
In order to be a licensed domestic airline, Flair Airlines must be incorporated in Canada and at least 51 per cent of voting shares must be owned and controlled by Canadians, according to the CTA.
Flair Airlines is incorporated in B.C. and 58 per cent of voting shares are owned by Canadians, CEO Stephen Jones said on Thursday.
However, Jones said the CTA told Flair Airlines its unanimous shareholders agreement did not show Canadian control "explicitly enough."
Jones said Flair Airlines accepted that the document, created in 2018, needed revisions to clarify that, and in consultation with CTA, the company made amendments and "the CTA has confirmed to Flair that these amendments address all of the corporate governance concerns that it has raised."
The airline's new board of directors increased from five to nine and 777 Partners' directors decreased from three to two.
Flair Airlines, however, owes millions of dollars to 777 Partners after the shareholder funded the company's day-to-day operations earlier in the COVID-19 pandemic.
Jones told media Flair Airlines is no longer dependent on 777 Partners and that the Miami-based company "never used the fact that they were providing us cash to exert day-to-day control."
"Flair was not part of the billions in bail-out funding that was provided to Air Canada and other large carriers," Jones said.
"Instead, we turned to our shareholders to survive, and 777 Partners provided a lifeline to protect thousands of jobs from coast to coast and to ensure Flair could continue our mission to provide affordable travel to all Canadians."
In a statement to CTV News on April 12, 777 Partners said: “777 does not control Flair Airlines. As a minority shareholder in Flair, 777 Partners is proud of the support it has provided Flair since its investment, and in particular the unwavering financial support it provided during the pandemic."
Jones said Flair Airlines has already refinanced nearly $18 million worth of debt and that it plans to repay the rest by being a successful and profitable airline, refinancing part of the loans, and eventually, listing Flair on the Toronto Stock Exchange.
In the meantime, Flair Airlines has asked the federal government for an 18-month exemption to sort out its finances.
"The only thing that will remain is the fact 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 and the CTA will form a view on that."
Two airline associations that represent Air Canada, WestJet and other carriers called on Transport Minister Omar Alghabra to reject Flair’s exemption request and warned that a green light would set a “troubling precedent."
Jones said Flair will respond to the CTA by May 3 and that it will not lose its operating licence that day.
With files from The Canadian Press
CTVNews.ca Top Stories
Liberal MP says she's leaving politics over disrespectful dialogue, threats, misogyny
Liberal MP Pam Damoff says she won't run again in the next federal election, saying she has experienced misogyny, disrespectful dialogue in politics and threats to her life.
Concerns about Plexiglass prompt inspections at some Loblaws locations in Ottawa
Inspections are underway at more than one Loblaws location in Ottawa after complaints were filed about tall Plexiglass barriers.
Federal employees will be required to spend 3 days a week in the office
Starting in September, public servants in the core public administration will be required to work in the office a minimum of three days a week. The Treasury Board Secretariat says executives will need to be in the office four days per week.
OPP officer said 'someone's going to get hurt' before wrong-way Hwy. 401 crash
As multiple Durham police cruisers were chasing a robbery suspect on the wrong side of Highway 401 Monday night, an Ontario Provincial Police officer shared his concerns, telling a dispatcher, "Someone's going to get hurt."
Ont. woman who faked pregnancy to defraud doulas arrested again on similar charges
Victims of a Brantford, Ont., woman who was sentenced to house arrest earlier this year for defrauding and deceiving doulas say they’re not surprised she’s been apprehended again on similar charges.
Five human skeletons, missing hands and feet, found outside house of Nazi leader Hermann Göring
Archeologists have unearthed the skeletons of five people, missing their hands and feet, at a former Nazi military base in Poland.
Poilievre returns to House unrepentant for calling Trudeau 'wacko,' Speaker not resigning
An unrepentant Pierre Poilievre returned to the House of Commons on Wednesday to pepper the prime minister about his drug decriminalization policies after being booted the day prior for refusing to take back calling Justin Trudeau 'wacko' over his approach to the issue.
Construction begins on LGBTQ2S+ national monument in Ottawa
Shovels have hit the ground for constuction on Canada's LGBTQ2S+ national monument in Ottawa.
B.C. man awarded $5,000 in damages in first-of-it-kind intimate image case
In a first-of-its-kind case, a B.C. tribunal has ruled on a dispute involving the non-consensual sharing of intimate images, awarding damages and issuing orders that the photos be destroyed and taken offline.