Flair Airlines says it has made “significant concessions” to the federal regulator in a bid to stave off the loss or suspension of its operating licence.
The Canadian Transportation Agency on March 3 issued a preliminary decision the Edmonton-based airline might not be Canadian because of the control exerted by Miami-based 777 Partners, a 25-per-cent owner, lender and provider of leased aircraft to Flair. The CTA gave Flair until May 3 to respond or risk losing its licence.
Flair spokesman Mike Arnot said in an interview on Wednesday that Flair responded by the deadline with a package of reforms that Flair’s executives are confident will satisfy the regulator. “In that response and over the course of the past week, Flair has made some significant concessions on the elements of concern that the CTA had” including corporate finance and governance, he said.
Flair has diversified its investor base to include more Canadians, he said, and made changes “to isolate the impact of the debt that Flair owes to 777 Partners so the debt is not a lever of influence,” Mr. Arnot said. “Flair has offered ongoing transparency and oversight by the CTA,” he added.
Mr. Arnot declined to provide details on the amendments to debt agreement with 777 Partners, which The Globe and Mail has reported was $129-million at 18-per-cent interest in late 2020.
Flair has said it will name more Canadians to its board, which was comprised of three American 777 Partners executives and two Canadians.
Foreigners are allowed to own as much as 49 per cent of a Canadian airline, with individual stakes capped at 25 per cent. Additionally, no foreigner can exert control over a domestic airline, calling the shots and dictating management’s decisions. The CTA’s preliminary ruling found 777 Partners appeared to violate this requirement.
“No Canadian or group of Canadians are in a position to exercise control over Flair,” the CTA said in its preliminary decision.
The CTA said in a statement it is reviewing Flair’s submission and will issue a decision on June 1.
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