Did you hear that ? Flair Airlines is Canadian , can keep its licence , said Canadian Transportation Agency !

A big relief for the budget carrier, Flair Airlines is Canadian ! The Canadian Transportation Agency (Agency) issued today its final determination and found that Flair is Canadian.

"There is zero chance that Flair is losing its license on May 3rd. Flair is here to finally make air travel affordable for all Canadians. The cost of air travel in Canada has been too high for too long, and I think we all know the reason why that is." - Stephen Jones, CEO.

Now, these quotes are proving to be true and the critics are definitely at the backfoot seeing the Company's Licence being not revoked. 

Apparently, it worked , the overhauled structure to lessen the influence of Miami-based private investment firm 777 Partners LLC, whom it turned to for its debt refinancing seemed to have satisfied the investigators of the agency.

The discount airline has made changes to its structure and now “meets the incorporation and voting interest requirements” required by law, the Canadian Transportation Agency said in its final determination, announced Wednesday.

The latest ruling implies the Edmonton-based upstart carrier can keep its operating licence.

Canadian legislation allows no more than 49 per cent ownership of a Canadian airline by foreign entities.The regulator said in March in its preliminary determination that Flair may not be controlled by Canadians and may not be “Canadian” as defined in the Canada Transportation Act.

The CTA had been investigating Flair's ownership to determine whether its relationship with Miami-based investor 777 Partners violated those rules.

Flair has made a number of changes as a result of the investigation, including a promise to increase the number of Canadians on its board.

Under the Canadian law, at least 51% of a company’s voting interests must be owned and controlled by Canadians, and no more than 25% of the voting interests can be owned directly or indirectly by one or more non-Canadians.

Canadian Transport Agency said,

"After considering all of the facts, the Agency found that Flair addressed the concerns raised in its preliminary determination. In particular it found that:"

• As a result of changes related to Flair’s Board provisions, including composition and quorum requirements, Canadian shareholders now have the right to appoint no less than half of the Board, and no less than half of the members of the Board must be Canadian.
• As a result of amendments to its USA, 777 no longer holds unique shareholder rights.
• Flair has demonstrated it can generate positive cash flow from operations, alleviating concerns it would be dependent on 777 for additional new financing.
• Flair has amended the Promissory Note Agreement with 777 to ensure that debt funding will continue to be available until at least 2026 thereby considerably mitigating 777’s ability to exert influence over Flair.
• Flair has demonstrated that it can lease new aircraft without having to rely on 777.

Flair has been facing opposition from larger rivals Air Canada, WestJet and 30-odd other carriers who have publicly called for the regulator to rule against it. But, scenario is going to change fast as transport regulator has the positive news for the Edmonton based carrier.

Read more....