The decision by the
“The decision that is coming out today is very clear, it’s black and white," said
But Flair has come under scrutiny from the CTA, which has been investigating to determine if it complies with rules around foreign ownership of Canadian airlines.
Legislation allows no more than 49 per cent ownership of a Canadian airline by foreign entities, and the Canada Transportation Act also states no one foreign player can own more than a quarter of a carrier, or exert effective control over it.
That put Flair's relationship with
Flair was given until
In its determination Wednesday, the regulator stated Flair has in fact done just that, by rejigging the composition of its board so that at least half of the directors will be Canadians. In addition, 777 Partners will no longer hold any unique shareholder rights.
The CTA said Flair has also demonstrated it can generate positive cash flow from its operations, alleviating concerns it would be financially dependent on 777 going forward. The airline is also refinancing the debt it owes to 777 to ensure debt funding will be available until at least 2026, which the CTA said considerably mitigates "777's ability to exert influence over Flair."
Flair currently leases six of its 14 aircraft from 777 and the rest from
“We’ve gone through line by line and addressed (the CTA's concerns)," Jones 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.”
In March, two airline associations representing
Following Wednesday's ruling, one of those associations — the
"By failing to comply with basic and fundamental Canadian ownership and control requirements, Flair knowingly placed considerable uncertainty on the shoulders of travelers and threatened consumer confidence in the sector at a time when the travel industry is working hard to provide a strong and sustainable future for air travel for Canadians," said
"While we may not agree with some of the premises put forward in this determination, it is the government's prerogative to render (such) decisions and we accept that." McKenna said in an email.
Jones suggested Wednesday that opposition is a "natural reaction" to the competitive threat he believes Flair poses to the industry.
"There’s been such a cosy duopoly here for so long, that whenever you stir the pot, whenever you spoil the party ... of course people are going to be upset," he said.
This spring, Flair expanded from 12
This report by
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