Flair Airlines can keep operating in Canada, transportation agency rules

One of Canada’s biggest budget airlines is being allowed to keep flying routes in the country.

Flair Airlines will not have to ground its aircrafts following a decision Wednesday by the Canadian Transportation Agency (CTA) that determined the airline was indeed “Canadian.”

The Edmonton-based low-cost carrier previously requested an 18-month exemption from Canadian ownership rules, a move that received some industry backlash, over concerns an American shareholder had too much control of the company.

In a preliminary determination in March, the federal transport regulator found that Flair may not be “controlled in fact” by Canadians – a violation of federal law.

The CTA at the time found Miami-based investor 777 Partners holds a “dominant” influence over the airline.

But on Wednesday the transportation agency ruled Flair was Canadian after investigating its ownership.

“The decision that is coming out today is very clear, it’s black and white,” said Flair Airlines chief executive Stephen Jones at a news conference held in Edmonton just minutes after the regulatory determination was made public. “Flair is Canadian – there’s no halfway road, there’s no conditions.”

Flair currently leases six of its 14 aircraft from 777 and the rest from U.S.- and Ireland-based companies.

The Canada Transportation Act states no one foreign player can own more than a quarter of the carrier or exert effective control over it.

Jones said Wednesday the airline has informed the CTA that going forward, a portion of its leases will be stand-alone with no links whatsoever to 777.

“We’ve gone through line by line and addressed (the CTA’s concerns),” he said. “Ourselves and 777 Partners have made significant concessions and changed things to make sure our position is without doubt – we are a Canadian airline.”

Airline associations that represent Air Canada, WestJet and other carriers had called on Transport Minister Omar Alghabra to reject Flair’s exemption request and warned that a green light would set a “troubling precedent.”

—With files from The Canadian Press