Flair Airlines tax debacle: investigation and asset seizures

Flair Airlines is under investigation for owing the federal government a sum of $67.2 million in unpaid taxes. This has led the Canada Revenue Agency (CRA) to seek a court order for the seizure and sale of the airline’s assets.

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CEO Stephen Jones stated that debt is related to the payment of import duties for the 20 Boeing 737 Max aircraft that make up the low-cost airline’s fleet. Jones claimed that the airline’s operations are not affected and have even expanded in the past year, intensifying competition.

«We have a mutually agreed-upon payment plan with the CRA for these import duties, and we are up to date with that plan,» Jones asserted. The details of the agreement remain confidential.

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Meanwhile, the CRA – which cannot make announcements about specific cases due to the confidentiality of its actions – emphasized its preference for negotiating agreements based on a company’s ability to pay before resorting to actions such as income or asset seizures.

Flair had already experienced the seizure of four aircraft in March by lessor Airborne Capital, which claimed non-payment of lease rents. The airline responded with a $50 million lawsuit against Airborne Capital and three other leasing companies, describing the ongoing payment demands as «unfounded.»

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The company is facing growing competition from WestJet – that’s uphelding its presence in western Canada – and low-cost carriers Lynx Air and Porter Airlines, both in significant expansion. Flair Airlines, now under official investigation, operates a total of 20 Boeing 737-800 (2) and 737 MAX 8 aircraft.