The Canadian Transportation Agency determined yesterday that Flair Airlines is Canadian. The Canada Transportation Act (CTA) requires airlines holding certain licenses issued by the agency to be Canadian.
Last March 3rd, the agency had issued a preliminary finding that United States-based 777 Partners LLC may in fact have control of the airline. The report highlighted the company’s control over Flair Airlines’ Board of Directors, the active role in its business and the airline’s dependence on aircraft financing and leasing.
Once the ruling was published, the self-described “Canada’s only ultra-low-cost airline” was given two months to prove its Canadian origin. On May 3rd, the company filed its response. The document included amendments to its (U.S.) Unanimous Shareholders Agreement and the promissory note governing the debt agreement between the two companies.
The Agency found that Flair addressed the concerns raised in its preliminary determination, it said. In particular, the resolution states that “Canadian shareholders now have the right to nominate no less than half of the Board”. In addition, “not less than half of the members of the Board must be Canadian”.
Furthermore, the airline demonstrated that it “can generate positive cash flow from operations, alleviating concerns that it is dependent on 777 Partners LLC for additional financing”. In turn, it also demonstrated that it could lease aircraft without relying on the U.S. company.
Foreigners can own up to 49% of a Canadian airline, with no single entity owning more than 25%. In Flair’s case, 777 Partners LLC now owns 25% of the airline. The airline is 58% Canadian-owned and 42% “non-Canadian” owned, according to the Agency.
Thus, Flair Airlines, which launched in 2004 as a charter airline and began offering scheduled services in 2018, will be able to continue operating. The company has already announced its growth plan for the next five years, a period in which it plans to expand its fleet to fifty aircraft.
See also: Flair Airlines will have flights to Tucson, Arizona
