CTA launches formal probe into Flair

[co-joe]

I have no idea, but I trust him. I believe he and management will sort this out, but that it will take some time.

[TrilliumFlt]

There is precedent for all of this, some may remember that the Deluce Family jumped in and "provided" the Canadian content for Air2000, it was rebranded as Canada 3000.

[SPR]

From the Globe and Mail article:

The airline said it needs more time to address the CTA’s objections to the involvement of 777 Partners, which it said offered stability when no other financial backing was available. “This support included providing operating capital by way of debt to Flair, as well as enabling Flair to access new aircraft that, given its balance sheet and credit status, Flair would not have been able to obtain on its own,” the airline said.

Reading between the lines, and seeing how heavily the management system is weighted towards 777 Partners, it seems to me that the financial support they provided to Flair was contingent on them getting the majority of board seats and forcing Flair to lease an unreal number of aircraft, which effectively grants them control. It's hard to see how else an owner that has 18% of the shares would have so much power besides the threat that they'll pull their money and planes if they have to give up those seats. Based on the statement above, it seems that Flair was in dire financial circumstances that rendered it unable to find anyone who was willing to invest or loan it any money, and they resorted to basically handing the company over to 777 in exchange for board seats, aircraft leases, and loans with an exorbitant interest rate. I assume that if 777 is forced to give up one or more board seats that they'll walk, along with their money and hardware. On top of that, the fact that they own Flair's planes and debt gives them an undue amount of influence over the airline, so giving up only one board seat might not be enough.

[Gregor]

It's likely in the best interest of the travelling public to allow them to regroup and proceed, and this is part of the criteria that will factor into the CTA assessment. The problem is going to stem from testing whether Flair's very existence, no matter how compliant currently or in the future, was a result of illegal action, giving them a very unfair advantage to grab market share. If the CTA determines that is a fact, even as as part of a judgment that allows them to likely continue operating, it won't limit culpability, and expect that to open the door for MASSIVE suits from all other airlines that will request all kinds of things from financial compensation to operating concessions. That wouldn't go away anytime soon, and I'd say it's a pretty likely scenario.

Having a bunch of board members resign and having the in-fighting Prescott lawsuit also running concurrently aimed at the legality of 777 influence indicates some pretty sketchy stuff. Where there's smoke there's fire.

[Flightgame]

Wondering why they are still hiring with all these going on !

[RustyDeuce]

More info has come to light according to a recent story in the Globe and Mail.

Flair wants the CTA to grant it exclusive dispensation for 18 months to operate with a competitive advantage unavailable to all others who scrupulously follow Canadian foreign ownership rules.

Hmm. What would happen if 60% of WestJet’s board were Delta Airlines appointees, financing came from Delta and most of the fleet was owned by Delta?

Anyone recall what happened to Greyhound Air in May 1996 when they tried the same sort of ownership / control stunt?

Unless Flair attracts a ton of Canadian investment money PDQ and 777 Partners influence is drastically curtailed, this is not going to end well for anyone connected to Flair.

The CTA knows that Flairs 13 tails / capacity can easily be replaced by incumbents, not to mention Lynx, within a few weeks. Long timers will recall that shutdowns / strikes cause chaos for about 2-3 days before things revert to the new normal. No big deal.

Nice to see you alive and posting again.

[RustyDeuce]

Flair grew an airline in violation of foreign ownership rules.
They did it knowing they were in violation.
They now need 18 months to "figure it out".
Nope. Good night Flair.
F*ck around and find out.

[co-joe]

Wondering why they are still hiring with all these going on !

How else are they going to staff the 7 more Max 8's coming in the next 7 weeks? It's business as usual at F8 right now, and that business is expansion. The ULCC market share is only so big, and whoever fills the market first gains the advantage. Onex knows it and that's why they're buying 6 new Max 8's for Swoop.

This is a race to permanently expand the Canadian aviation market. Most ULCC passengers are new to flying commercially in Canada. Where some see the ULCC as the race to the bottom, I see it as actual growth of our industry. AC and WS aren't contracting (Well WS is but they're shrinking to grow Swoop), this is literally the growth of our industry and it means more jobs for pilots in total.

[co-joe]

From the Globe and Mail article:

The airline said it needs more time to address the CTA’s objections to the involvement of 777 Partners, which it said offered stability when no other financial backing was available. ...

That statement is aimed directly at the Canadian government that offered or gave loans to all the other carriers in the market except Flair who received nothing (except CEWS). If 777 hadn't extended that credit, none of this would have happened.

Edit: Thanks DanWEC

[co-joe]

This post intentionally left blank.

[DanWEC]

Edit: I can't reply to the last comment for some reason, the forum keeps merging my comment and the one in the slash quote whenever I try.

It's a nested quote, prob just need an additional "bracket /quote bracket" to close the second level.


Cheers!

[Arnie Pye]

The CTA knows that Flairs 13 tails / capacity can easily be replaced by incumbents, not to mention Lynx, within a few weeks. Long timers will recall that shutdowns / strikes cause chaos for about 2-3 days before things revert to the new normal. No big deal.

Nice to see you alive and posting again.

Interesting that you bring up Lynx as an overnight replacement. Where does their money come from again? Did David Neeleman become a Canadian recently? I don't think that Enerjet 3.0 had any money to buy 40 brand new MAX's. Pretty sure that what is happening to Flair also applies to Lynx. When Westjet is done dragging Flair's name through the mud, Lynx will be next.

[Realitychex]

You are correct in that if Lynx has chosen to pick and choose which Canadian regs and laws they choose to abide by, they too are headed into a stiff wind.

Indigo's m/o is to control what they invest in so we'll see what transpires. If their noses are clean, you can bet your next paycheck they've submitted a blistering letter of complaint to the CTA, together with every other carrier in the US and Canada who play by the rules.

Where did you get the idea DGN is involved with Lynx? He's got his hands full with Azul and Breeze.

[nynybear]

You are correct in that if Lynx has chosen to pick and choose which Canadian regs and laws they choose to abide by, they too are headed into a stiff wind.

Indigo's m/o is to control what they invest in so we'll see what transpires. If their noses are clean, you can bet your next paycheck they've submitted a blistering letter of complaint to the CTA, together with every other carrier in the US and Canada who play by the rules.

Where did you get the idea DGN is involved with Lynx? He's got his hands full with Azul and Breeze.

You've just described the exact same scenario regarding Lynx/F8. They both have significant US investment, but neither have majority foreign ownership. The issue is control and both would not stand a chance without foreign investment . You really think Indigo will let Lynx do whatever it wants? I highly doubt that they will be looking to influence a small percentage when Lynx owes them major $$. This will all be sorted out and Lynx better hope it is just as much as Flair.

The real problem is the Canadian monopoly system. Nobody is asking the right questions as to how are we ever going to get increased options with lower prices without significant foreign investment. That goes for just about everything in Canada.

[fish4life]

You are correct in that if Lynx has chosen to pick and choose which Canadian regs and laws they choose to abide by, they too are headed into a stiff wind.

Indigo's m/o is to control what they invest in so we'll see what transpires. If their noses are clean, you can bet your next paycheck they've submitted a blistering letter of complaint to the CTA, together with every other carrier in the US and Canada who play by the rules.

Where did you get the idea DGN is involved with Lynx? He's got his hands full with Azul and Breeze.

You've just described the exact same scenario regarding Lynx/F8. They both have significant US investment, but neither have majority foreign ownership. The issue is control and both would not stand a chance without foreign investment . You really think Indigo will let Lynx do whatever it wants? I highly doubt that they will be looking to influence a small percentage when Lynx owes them major $$. This will all be sorted out and Lynx better hope it is just as much as Flair.

The real problem is the Canadian monopoly system. Nobody is asking the right questions as to how are we ever going to get increased options with lower prices without significant foreign investment. That goes for just about everything in Canada.

If the Canadian monopoly you are referring to is the airports and their ridiculous AIF’s then I’d agree. How can we ever have affordable tickets when $100 of a round trip ticket it’s AIF/ Nav can fee’s

[nynybear]

You are correct in that if Lynx has chosen to pick and choose which Canadian regs and laws they choose to abide by, they too are headed into a stiff wind.

Indigo's m/o is to control what they invest in so we'll see what transpires. If their noses are clean, you can bet your next paycheck they've submitted a blistering letter of complaint to the CTA, together with every other carrier in the US and Canada who play by the rules.

Where did you get the idea DGN is involved with Lynx? He's got his hands full with Azul and Breeze.

You've just described the exact same scenario regarding Lynx/F8. They both have significant US investment, but neither have majority foreign ownership. The issue is control and both would not stand a chance without foreign investment . You really think Indigo will let Lynx do whatever it wants? I highly doubt that they will be looking to influence a small percentage when Lynx owes them major $$. This will all be sorted out and Lynx better hope it is just as much as Flair.

The real problem is the Canadian monopoly system. Nobody is asking the right questions as to how are we ever going to get increased options with lower prices without significant foreign investment. That goes for just about everything in Canada.

If the Canadian monopoly you are referring to is the airports and their ridiculous AIF’s then I’d agree. How can we ever have affordable tickets when $100 of a round trip ticket it’s AIF/ Nav can fee’s

You are absolutely correct as well! $1200++ YVR-YYC round trip so what's the other $1100 going towards? If overall prices trend down, and dare I say yields for the executives, while independent ULCCs are still around in Canada then you'll know why. Blue eyes may have initially campaigned on breaking up the monopolies to generate more choices at reasonable prices for Canadians but evidently it's gotten worse along with his hair.

[elite]

The comments from Flair seem to indicate they have been in breach of the law for some time and they have known it too. It is ridiculous that they expect to have an additional year and half at the expense of every other airline to further expand and consolidate. Is Flair a real business that has to profit and grow, or does it it just have to make lease payments to 777 while it no doubt amasses hundreds of millions in debt to Canadian companies that supply it what it needs and then someday will be left holding the bag when it files for bankruptcy protection, meanwhile 777 has collected all its lease payments?!

Then there’s the issue of foreign ownership which if changed for one company, will have to be changed for all, and that would make all Canadian airlines vulnerable to take overs overnight. Is accommodating Flair in its private business with an American leasing company worth that much risk for the whole country? There doesn’t seem to be a problem for other airlines!! Good night Flair seems to be right! If a company breaks the law, it has to suffer the consequences.

[rooster]

The comments from Flair seem to indicate they have been in breach of the law for some time and they have known it too. It is ridiculous that they expect to have an additional year and half at the expense of every other airline to further expand and consolidate. Is Flair a real business that has to profit and grow, or does it it just have to make lease payments to 777 while it no doubt amasses hundreds of millions in debt to Canadian companies that supply it what it needs and then someday will be left holding the bag when it files for bankruptcy protection, meanwhile 777 has collected all its lease payments?!

Then there’s the issue of foreign ownership which if changed for one company, will have to be changed for all, and that would make all Canadian airlines vulnerable to take overs overnight. Is accommodating Flair in its private business with an American leasing company worth that much risk for the whole country? There doesn’t seem to be a problem for other airlines!! Good night Flair seems to be right! If a company breaks the law, it has to suffer the consequences.

The sourness from some of you. So other airlines in Canada get money from the government, and Flair got nothing. 777 partners was there financially. You think Flair was going to say "no it's not right, it's not fair"? Nah. They were in survival mode when the government turned their back. I say they are responsible and the rest of you need to calm the eff down. This has created jobs in Canada for pilots. Why you mad bro? Freakin canadian pilots. Selfish group eh?

[goingmissed]

The comments from Flair seem to indicate they have been in breach of the law for some time and they have known it too. It is ridiculous that they expect to have an additional year and half at the expense of every other airline to further expand and consolidate. Is Flair a real business that has to profit and grow, or does it it just have to make lease payments to 777 while it no doubt amasses hundreds of millions in debt to Canadian companies that supply it what it needs and then someday will be left holding the bag when it files for bankruptcy protection, meanwhile 777 has collected all its lease payments?!

Then there’s the issue of foreign ownership which if changed for one company, will have to be changed for all, and that would make all Canadian airlines vulnerable to take overs overnight. Is accommodating Flair in its private business with an American leasing company worth that much risk for the whole country? There doesn’t seem to be a problem for other airlines!! Good night Flair seems to be right! If a company breaks the law, it has to suffer the consequences.

The sourness from some of you. So other airlines in Canada get money from the government, and Flair got nothing. 777 partners was there financially. You think Flair was going to say "no it's not right, it's not fair"? Nah. They were in survival mode when the government turned their back. I say they are responsible and the rest of you need to calm the eff down. This has created jobs in Canada for pilots. Why you mad bro? Freakin canadian pilots. Selfish group eh?

You might as well sign your post off with "a pissed off Flair pilot."

The regulations are there for a reason and unfortunately, it's not just those who are choosing to violate them that are going to be hurt.

I am sorry that you might get the short end of the stick.

[rooster]

The comments from Flair seem to indicate they have been in breach of the law for some time and they have known it too. It is ridiculous that they expect to have an additional year and half at the expense of every other airline to further expand and consolidate. Is Flair a real business that has to profit and grow, or does it it just have to make lease payments to 777 while it no doubt amasses hundreds of millions in debt to Canadian companies that supply it what it needs and then someday will be left holding the bag when it files for bankruptcy protection, meanwhile 777 has collected all its lease payments?!

Then there’s the issue of foreign ownership which if changed for one company, will have to be changed for all, and that would make all Canadian airlines vulnerable to take overs overnight. Is accommodating Flair in its private business with an American leasing company worth that much risk for the whole country? There doesn’t seem to be a problem for other airlines!! Good night Flair seems to be right! If a company breaks the law, it has to suffer the consequences.

The sourness from some of you. So other airlines in Canada get money from the government, and Flair got nothing. 777 partners was there financially. You think Flair was going to say "no it's not right, it's not fair"? Nah. They were in survival mode when the government turned their back. I say they are responsible and the rest of you need to calm the eff down. This has created jobs in Canada for pilots. Why you mad bro? Freakin canadian pilots. Selfish group eh?

You might as well sign your post off with "a pissed off Flair pilot."

The regulations are there for a reason and unfortunately, it's not just those who are choosing to violate them that are going to be hurt.

I am sorry that you might get the short end of the stick.

Huh? I'm not a Flair pilot bud, what are you on about? What do you expect someone in survival mode to do? They got no help from the government when everyone else did. f you were in a position to save yourself, if it meant breaching the law, you'd say no and let yourself die? LOL! I don't know what's really going on with this CTA issue. None of you do, but I bet this goes away. If you actually think Flair shuts the doors, by their own volition or not, you're naive and a moron. It's pretty clear given everything they've been through that they are not going anywhere, as much as some of you foaming at the mouth wish they did.

Get on with your lives guys. Christ. Aviation is coming alive again in Canada and pilots are getting hired. Ya'll are whining over ownership? What about duopolies gouging passengers? One with a history of being bailed out by the government with taxpayer money. Sheesh.

Flair says they are disrupting the industry with low fares. I think they are disrupting sour pilots like yourself

I say go Flair go. Same with Lynx. If it stimulates aviation in this country, I'm ALL for it.