Canada’s transportation regulator is investigating the ownership of Edmonton-based Flair Airlines, a move that was first reported by the Globe and Mail earlier this week.
Miami-based 777 Partners owns 25 per cent of Flair, occupies three of its five board seats, and leases several planes to the airline.
The Canadian Transportation Agency (CTA) is reviewing Flair's compliance with laws that limit the control a foreign investor can have in a domestic airline, the Globe reported.
The CTA can issue fines and suspend an airline’s operating licence if a carrier is found to be in violation of Canadian regulations.
Foreign investment in a Canadian airline cannot exceed 49 per cent, or 25 per cent by an individual. And foreigners cannot control an airline.
The probe was launched after a CTA panel found enough evidence to proceed with an investigation, the Globe reported.
Stephen Jones, Flair’s CEO, told the Globe that the company is “completely compliant with all applicable airline regulations, including those dealing with Canadian control.”
“Flair is a private company, and while we have always and will continue to co-ordinate with all regulators as necessary, our shareholdings and financial affairs are confidential,” Jones stated.
In November, Flair said it was 58 per cent owned by Canadians. At the same time, three of Flair’s five directors are Americans who either own or are employed by 777 Partners, according to incorporation filings in British Columbia, the Globe story outlined.
Flair "may" not be Canadian
Yesterday, (March 3), the CTA issued a "preliminary determination" on whether Flair is, in fact, Canadian.
“Flair may not be controlled in fact by Canadians and may, therefore, not be ‘Canadian,’ as defined in the Canada Transportation Act SC 1996, c 10.” the agency wrote in a statement posted on its website.
Flair holds licenses authorizing domestic, scheduled international, and non-scheduled international air services. “Pursuant to the Act, Flair must be Canadian to provide these air services,” the CTA wrote.
The agency noted that three requirements must be met for an air carrier to be considered Canadian: the incorporation or formation requirement, the voting interest requirement, and the control in fact requirement.
The CTA said it has provided Flair with an opportunity to respond no later than 60 calendar days from the date of issuance.
“At the end of the review process, the agency will issue a final public determination with reasons and its conclusions, which will be posted on its website,” the CTA wrote.
Flair announced ambitious plans in early 2021 to grow its fleet to 50 aircraft by 2025, leasing the first 13 of the Boeing 737 Max jets from 777 Partners.
Last month, Flair launched weekly service to Cancun from Kitchener-Waterloo and Ottawa, and to Los Cabos from Abbotsford, Edmonton, and Vancouver.
The low-cost airline also recently announced an expansion of its base at Region of Waterloo International Airport, adding more destinations out of YKF with service to Charlottetown and Saint John, both beginning in June.