The CEO of Flair Airlines came out swinging to defend his company on Thursday saying his low fare airline is here to stay no matter what the big guys throw at him.
Stephen Jones was responding to weeks of stories about Flair potentially losing its licence to operate for not being Canadian enough under law.
At a time when Canadians need discount options to travel after two years of COVID lockdowns and restrictions, the idea that one of the few discount airlines would be shut down seemed shocking. Yet it could have happened, leaving passengers paying more for flights over what Flair says are technicalities.
“Flair Airlines is here to stay,” Jones said. “Canadians can continue to book incredibly affordable air fares with confidence.”
Questions have been circling Flair since the Canadian Transportation Agency released a preliminary finding on March 3 that “Flair may not be controlled in fact by Canadians.” Such a finding, were it to stand, could see the airline’s operating licence revoked, something Jones said will not happen.
“There is zero chance that Flair will lose its license on May 3,” Jones said.
The CTA had expressed concern that the company that leases Flair its planes and owns a 25% stake in the company, may have taken effective control of the company after providing emergency financing to help Flair weather the COVID pandemic. The arrangements left Flair’s minority shareholder, 777 Partner of Miami, with the majority of board seats, something that raised questions for the CTA.
Jones said those issues have now been rectified with 777 Partners being reduced to two seats on an expanded nine member board and a revised shareholder agreement to deal with any outstanding issues.
Beyond that, Flair has asked for an 18-month exemption from the current rules in order to give the company time to restructure their debt, including what is owed to 777 Partners. Given that similar exemptions have been given in the past, including a five-year foreign ownership exemption issued to Canada Jetlines in 2016, the 18-month request from Flair will likely be granted.
Jetlines is about to launch a new ultra-low-cost carrier as discount airlines are known in the business. They will join Flair and soon Lynx in offering cheap flights to Canadian leisure travellers.
It’s a business model that exists across the United States, Britain, Ireland and Europe but has been absent here. Air Canada runs Rouge, which they bill as a discount airline but doesn’t really cut it, while WestJet is trying to build Swoop, which they say will be a true discount airline.
“Canadians have been paying too much for air travel,” Jones said, blaming what he called the duopoly of Air Canada and WestJet. “It should not be cheaper to fly to Europe than to fly within our country.”
Yet too often it is.
A search of return flights from Toronto to Calgary leaving on April 28 and returning on May 5 showed a fare of $911.65 on Air Canada, $727.46 on WestJet while Flair offers a seat for just $339.89.
We desperately need competition in Canada’s airline industry, the rest of the world has options that we simply don’t. A big part of the problem, for the big airlines and the discount crew, is government regulation that either gets in the way of offering choice or drives up costs.
There are times when flying with the big guys will make sense and times when you just want a quick getaway. Just like sometimes you want a nice suit and shopping experience and other times you just want to grab a T-shirt at Walmart, so it should be with the airlines.
Hopefully soon, Canada can catch up to the rest of the world.