• Wed. May 11th, 2022

Canadian airline industry calls on Ottawa to reject Flair exemption

ByKimberly A. Brochu

Apr 20, 2022

At stake is the low-cost airline’s ability to fly into Canada

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Members of the Canadian airline industry are calling on the federal government to deny Flair Airlines Ltd. temporary exemption from the Canadian ownership requirement.

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“If granted, this unprecedented request would allow Flair to continue to operate outside the confines of existing Canadian law, setting a troubling precedent while threatening consumer confidence in the sector, at a time when the voyage works hard to provide a solid and long-lasting service. the future of air travel for Canadians,” the National Airlines Council of Canada and the Air Transport Association of Canada said in a joint statement.

Together, the two groups represent Canada’s major airlines — Air Canada Inc., WestJet Airlines Ltd., Transat AT Inc. — small cargo carriers and suppliers to the aviation industry.

Flair is facing an investigation by the Canadian Transportation Agency to find out if it meets Canadian ownership requirements. Under the Act, at least 51% of a corporation’s voting shares must be Canadian, and no more than 25% of the voting shares may be held by a single non-Canadian corporation or person.

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At issue is Miami-based 777 Partners, which owns a 25% stake in Flair, leases its planes to the airline and has members on its board of directors.

Edmonton-based Flair, who has until May 3 to respond to the agency’s preliminary findings or possibly have his license suspended, has applied for an 18-month exemption to deal with the issue.

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But aviation industry groups argue Canada’s Screening Act is important to ensure airlines are committed to the country and won’t raise the stakes and leave passengers stranded, especially at a time where airlines are trying to restore traveler confidence after the pandemic.

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“Allowing Flair’s operations to continue outside of long-standing and clear laws would set a dangerous precedent for aviation, business and, most importantly, Canadian consumers,” the statement said.

“Domestic control and ownership is not just ‘an advantage to have’, it is a necessary foundation of the system and must be defended. It ensures that there is fundamental fairness and protects against a diluted or foreign-owned business harming the competitiveness of the entire industry.

The possibility that Flair could have his license suspended has worried Canadians who have booked tickets on the airline on social media for their flights.

“We have a trip planned for mid-May,” one user wrote. “Even with all the bad reviews, my husband and I decided to take the plunge and try our luck with Flair only to find out a few weeks after booking the allegations. I couldn’t be more nervous about a robbery.

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The two groups calling on the government to reject Flair’s exemption say their member airlines are prepared to “mitigate the impacts on travelers and workers” if the airline is forced to close.

Flair Airlines hit back Wednesday in a statement describing recent speculation about the company and the outcome of the CTA’s review as “baseless” and “mischaracterized by Flair’s competitors.”

“Air Canada deployed anti-competitive practices against WestJet and WestJet borrowed Air Canada’s playbook to launch anti-competitive practices against Flair Airlines,” CEO Stephen Jones said in a statement. “Today they’re teaming up to protect their high rates, which is great for them, but not for Canadian families. Without Flair, Canada has one of the highest airfares in the world.

The company said Jones will address the situation at a press conference on April 21.

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