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Flair Airlines retains license after Canadian Transportation Agency review – Reuters

Discount carrier Flair Airlines is allowed to keep its license after the Canadian Transportation Agency concluded on Wednesday that the company “is Canadian”.

The Edmonton-based airline was under scrutiny by the transportation regulator because a US shareholder, Miami-based 777 Partners, wielded too much power.

But the CTA said Wednesday that Flair “addressed the concerns raised in its preliminary ruling” and, with the changes, met the definition of a Canadian airline.

“While we never doubted it, it’s still great to say once and for all: Flair is Canadian,” CEO Stephen Jones said at a press conference in Alberta’s capital on Wednesday morning. .

The investigation into the distribution of powers between Flair shareholders was launched in March.

Over the past two months, Jones said Flair and CTA have gone “line by line” through the company’s books.

Flair risked having her license revoked if she could not prove her Canadianity.

“We made significant concessions ourselves, and 777 Partners made significant concessions,” Jones commented.

The changes include certain changes in the governance of Flair: Canadian shareholders must constitute at least half of Flair’s board of directors, the chairman of the board and each sub-committee chairman must be Canadian, and all Canadian directors must be nominated by Canadian shareholders.

In addition, Flair had to demonstrate to the CTA that he would not be financially dependent on 777 Partners. The company has agreed to ensure that part of its aircraft leases are in no way tied to the US shareholder. He also restructured his debt with 777 Partners, which he says he took on during the pandemic when he was ineligible for bailout funding from the Canadian government.

“We kind of took away from people any possibility of perceiving that we could be controlled by the [debt] Remark. It’s not that we were, but the perception was there, so we sorted that out.”

“WE ARE HERE TO COMPETE”

The changes will have no impact on Flair’s ability to offer low fares, Jones promised.

In fact, in addition to suggesting that Flair’s governance document should have been drafted more clearly in 2018, he called the CTA’s review “wild speculation” and an attempted takedown by competitors.

“There’s been such a comfortable duopoly here for so long that every time you stir the pot, every time you come and spoil the party by showing people you don’t need to spend $800, you can spend $150 $ to fly across the country, of course people are going to be upset,” Jones told reporters.

“At the end of the day, it’s invigorating. We love competition. We are here to compete. And we are here to win.”

Under the CTA, licensed domestic air carriers must be incorporated in Canada and own and control at least 51% of the voting shares owned and controlled by Canadians. No foreign shareholder may hold more than 25% of the voting rights.

When the review was launched, 777 Partners owned 25% of Flair and the Canadian shareholders 58%.

However, the Florida investment firm had funded Flair’s day-to-day operations earlier in the COVID-19 pandemic, leased aircraft from Flair, and once held the majority of Flair’s board seats, which raised fears that she could “influence” Flair’s decision-making. .

According to Jones, the resignations of two Canadian board members meant that the then seven-member board consisted of two Canadians and three directors from 777 Partners. In the meantime, a member of 777 Partners has resigned, leaving the ratio two to two.

The CEO expects a meeting to be called in June to fill the remaining seats. Although the board has been expanded to nine chairs, 777 Partners will continue to hold just two.

Jones said consumers should be reassured by the CTA’s decision and that Flair continued to address criticism of its handling of flight delays and cancellations with additional customer service staff and automation and better scheduling.

He held out an olive branch to customers in the form of a Flair sale, before closing the press conference by donning an Edmonton Oilers jersey – a nod to Canada’s last team in view of the Stanley Cup – and heading for the Canadian anthem.

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