Flair still searching for capital infusion

[julcancro]

Budget Airline Flair Is Seeking to Borrow $150 Million
(Bloomberg) -- Canada’s Flair Airlines Ltd. is looking to raise around $150 million of senior debt as part of an ongoing overhaul at the budget carrier.

The firm, which said in August it was in talks to raise funds, is working with Haywood Securities Inc. to do so, according to people familiar with the matter who asked not to be named discussing a private matter. Flair recently reported C$14.7 million ($10.5 million) of third-quarter Ebitda, one of the people added.

“We had a great third quarter and look forward to serving the Canadian public for the long term,” a Flair spokesperson said in a statement to Bloomberg News while declining to comment on financial details. Haywood Securities did not respond to requests for comment.

Flair has faced a series of hurdles the past few years, including former lead investor 777 Partners facing fraud allegations. That’s on top of higher costs, intense competition and the aftershocks of pandemic lockdowns that led to other Canadian peers filing for creditor protection. Just this week, US budget carrier Spirit Airlines Inc. filed for bankruptcy.

https://www.bnnbloomberg.ca/investing/2 ... 0-million/

[cdnavater]

EBITDA is short for earnings before interest, taxes, depreciation and amortization, what’s left of 14 million after all that is profit, so since they chose to use the EBITDA metric, one could assume zero profit.

[E2M]

Not going to help those who have multiple offers on the table decide what to accept

Is there going to be ground shcool in January and is it going to last to 2026 at least, that's tricky

[Core]

EBITDA of $14M means very little. It's well known that Flair is heavily indebted to 777 and others. Given they have a lean business model, I would bet they had a net loss of around -$20M. Could be as high as -$30M. They didn't make a mention of their margins.

As a frame of reference, using TRZ because it's public, has a similar fleet size, and is also in debt, posted a Q3 2024 EBITDA of $41M and that resulted in a net loss of -$40M. They need at least $80M to turn a profit with their debt servicing.

[Canadaflyer46]

Not going to help those who have multiple offers on the table decode what to accept

Is there going to be ground shcool in January and is it going to last to 2026 at least, that's tricky

Don't mean to be rude, but you'd be out of your mind to consider Flair a career option. They have been circling the drain for a long time, and anyone still working there knows it's only a matter of time. It'll happen suddenly and without warning too, just like Lynx. Then you'll be among hundreds of other pilots scrambling for a job. Don't put yourself in that position.

[Stable_Approach]

EBITDA of $14M means very little. It's well known that Flair is heavily indebted to 777 and others. Given they have a lean business model, I would bet they had a net loss of around -$20M. Could be as high as -$30M. They didn't make a mention of their margins.

As a frame of reference, using TRZ because it's public, has a similar fleet size, and is also in debt, posted a Q3 2024 EBITDA of $41M and that resulted in a net loss of -$40M. They need at least $80M to turn a profit with their debt servicing.

Profit at this point is irrelevant. They are a young airline and investors want to see a scalable business. The company I work at just posted a quarterly loss of $303.5 million and stock went up 10%. Business was expected to lose $480 million but we did better than expected and acquired another company thus growing the customer base. (non-aviation)

If they want to go public they will need some capital injected to take care of the old debt, take care of the taxes owing and they would be a decent small cap growth stock on the TSX which is filled with stagnant companies and dead money. Load factor and their completion rate has improved, next is improving customer confidence and getting more tails in the air to better service the schedule. Lynx is gone so competition is out of the way. Still a fair sizeable amount of customers not willing to pay AC/WJ fares and would prefer not to have to drive south of the border.

[julcancro]

let’s not slap a fresh coat of paint on a plane that’s already losing altitude. The point about Flair’s hefty debt and potential losses is dead-on...profit isn’t just irrelevant...it’s a pipe dream right now. sure, some investors love a scalability story, but let’s be real.. you can’t scale debt and shaky margins without a plan to turn those red numbers into black ink.

Comparing Flair to a company that took a smaller than expected loss while acquiring customers in a completely different industry doesn’t quite fly. Flair isn’t building a tech platform or expanding into growth markets , they’re stuck trying to carve out space in one of the most cutthroat, capital intensive industries there is. Add in the weight of debt servicing, a thin load factor cushion, and competition from even hungrier budget carriers, and the scalability pitch starts to sound more like a wing and a prayer.

Yes, there’s a customer base for low cost flights, but confidence in Flair, whether from customers or investors, won’t come from just showing potential. It’ll come from proving they can consistently make money in a market that’s eaten up weaker players. Until then, this isn’t so much a growth story as it is a "can we keep the lights on?" saga.

[a2btrail]

Not going to help those who have multiple offers on the table decode what to accept

Is there going to be ground shcool in January and is it going to last to 2026 at least, that's tricky

Don't mean to be rude, but you'd be out of your mind to consider Flair a career option. They have been circling the drain for a long time, and anyone still working there knows it's only a matter of time. It'll happen suddenly and without warning too, just like Lynx. Then you'll be among hundreds of other pilots scrambling for a job. Don't put yourself in that position.

Agreed. Anyone there now leave on your terms ASAP imo. WJ, POE OR AC are all great long term options. The pay cheque will not matter if the company ceases. You risk starting all over again at the bottom of a seniority list - leave now and start building a seniority base somewhere solid. Only strong balance sheet companies will survive. We are still in high interest rate environment. Baystreet and Wallstreet only care about sustained profitability over the long term. Pilots please put your business hat on not your pilot one.

[WJ200]

EBITDA of $14M means very little. It's well known that Flair is heavily indebted to 777 and others. Given they have a lean business model, I would bet they had a net loss of around -$20M. Could be as high as -$30M. They didn't make a mention of their margins.

As a frame of reference, using TRZ because it's public, has a similar fleet size, and is also in debt, posted a Q3 2024 EBITDA of $41M and that resulted in a net loss of -$40M. They need at least $80M to turn a profit with their debt servicing.

Profit at this point is irrelevant. They are a young airline and investors want to see a scalable business. The company I work at just posted a quarterly loss of $303.5 million and stock went up 10%. Business was expected to lose $480 million but we did better than expected and acquired another company thus growing the customer base. (non-aviation)

If they want to go public they will need some capital injected to take care of the old debt, take care of the taxes owing and they would be a decent small cap growth stock on the TSX which is filled with stagnant companies and dead money. Load factor and their completion rate has improved, next is improving customer confidence and getting more tails in the air to better service the schedule. Lynx is gone so competition is out of the way. Still a fair sizeable amount of customers not willing to pay AC/WJ fares and would prefer not to have to drive south of the border.

They are well past the point of being "new". At this point to say that they are "pre-revenue" is ludicrous and anyone with any sense (investors as well as job seekers) would be right to be sceptical of their sustainability. Profit at this level of maturity is the ONLY relevant issue and they've been trying to scale themselves into profitability for quite some time now. Ask yourself why they've been stuck at the number of tails they have since the repossessions and why they are seeking additional funds. I'd say it's not for expansion otherwise they'd be looking for a lot more. If it's not for expansion, then I'd ask myself what it actually is for.

[E2M]

Not going to help those who have multiple offers on the table decode what to accept

Is there going to be ground shcool in January and is it going to last to 2026 at least, that's tricky

Don't mean to be rude, but you'd be out of your mind to consider Flair a career option. They have been circling the drain for a long time, and anyone still working there knows it's only a matter of time. It'll happen suddenly and without warning too, just like Lynx. Then you'll be among hundreds of other pilots scrambling for a job. Don't put yourself in that position.

Agreed. Anyone there now leave on your terms ASAP imo. WJ, POE OR AC are all great long term options. The pay cheque will not matter if the company ceases. You risk starting all over again at the bottom of a seniority list - leave now and start building a seniority base somewhere solid. Only strong balance sheet companies will survive. We are still in high interest rate environment. Baystreet and Wallstreet only care about sustained profitability over the long term. Pilots please put your business hat on not your pilot one.

Oh dear, imagine saying no to a 737 offer letter. It'll hurt then and IF Flair sticks around for a year or two... but 100 times worse when you reject a solid offer and end up with none...

wait, why are they hiring 36 new pilots at 90k then? they are already leaving?

[cdnavater]

EBITDA of $14M means very little. It's well known that Flair is heavily indebted to 777 and others. Given they have a lean business model, I would bet they had a net loss of around -$20M. Could be as high as -$30M. They didn't make a mention of their margins.

As a frame of reference, using TRZ because it's public, has a similar fleet size, and is also in debt, posted a Q3 2024 EBITDA of $41M and that resulted in a net loss of -$40M. They need at least $80M to turn a profit with their debt servicing.

Profit at this point is irrelevant. They are a young airline and investors want to see a scalable business. The company I work at just posted a quarterly loss of $303.5 million and stock went up 10%. Business was expected to lose $480 million but we did better than expected and acquired another company thus growing the customer base. (non-aviation)

If they want to go public they will need some capital injected to take care of the old debt, take care of the taxes owing and they would be a decent small cap growth stock on the TSX which is filled with stagnant companies and dead money. Load factor and their completion rate has improved, next is improving customer confidence and getting more tails in the air to better service the schedule. Lynx is gone so competition is out of the way. Still a fair sizeable amount of customers not willing to pay AC/WJ fares and would prefer not to have to drive south of the border.

They are well past the point of being "new". At this point to say that they are "pre-revenue" is ludicrous and anyone with any sense (investors as well as job seekers) would be right to be sceptical of their sustainability. Profit at this level of maturity is the ONLY relevant issue and they've been trying to scale themselves into profitability for quite some time now. Ask yourself why they've been stuck at the number of tails they have since the repossessions and why they are seeking additional funds. I'd say it's not for expansion otherwise they'd be looking for a lot more. If it's not for expansion, then I'd ask myself what it actually is for.

Not only all of the above, how long have they been “seeking” a 150 million, seems like if it was possible, should have happened already.

[braaap Braap]

Profit at this point is irrelevant. They are a young airline and investors want to see a scalable business. The company I work at just posted a quarterly loss of $303.5 million and stock went up 10%. Business was expected to lose $480 million but we did better than expected and acquired another company thus growing the customer base. (non-aviation)

If they want to go public they will need some capital injected to take care of the old debt, take care of the taxes owing and they would be a decent small cap growth stock on the TSX which is filled with stagnant companies and dead money. Load factor and their completion rate has improved, next is improving customer confidence and getting more tails in the air to better service the schedule. Lynx is gone so competition is out of the way. Still a fair sizeable amount of customers not willing to pay AC/WJ fares and would prefer not to have to drive south of the border.

They are well past the point of being "new". At this point to say that they are "pre-revenue" is ludicrous and anyone with any sense (investors as well as job seekers) would be right to be sceptical of their sustainability. Profit at this level of maturity is the ONLY relevant issue and they've been trying to scale themselves into profitability for quite some time now. Ask yourself why they've been stuck at the number of tails they have since the repossessions and why they are seeking additional funds. I'd say it's not for expansion otherwise they'd be looking for a lot more. If it's not for expansion, then I'd ask myself what it actually is for.

Not only all of the above, how long have they been “seeking” a 150 million, seems like if it was possible, should have happened already.

I think last time the CEO was quoted as saying they were looking for 100 million so seems the boat is still taking on water

[CaptDukeNukem]

Don’t worry tho. Passengers get $60 if they are late. Free flying!!!

[planenuts]

Don’t worry tho. Passengers get $60 if they are late. Free flying!!!

...but only if they book another trip within 60 days. That's quite the small print catch they dont talk about.

I dont see a whole lot of 60 vouchers being given out.

[Timetoflyagain]

…in this business economy of scale is so tremendously important…Jetlines, Lynx, Flair and Porter all said they’d have 50 tails etc etc etc. J and L are gone, Porter is 44 or so and taking deliveries….Flair is down to 19 or 20…and with none on order from Boeing, massive competition from Ryanair, Easyjet and others for any Max, it’s unlikely Flair can win any bidding war with a lessor for new tails. There is a good supply or older 737’s, however a Canadian dollar in free fall will make any leases, parts and maintenance more expensive and potentially less trans border traffic as the dollar takes it toll. Domestic is summer and holidays. The pie simply isn’t that big.

[flyinhigh]

…in this business economy of scale is so tremendously important…Jetlines, Lynx, Flair and Porter all said they’d have 50 tails etc etc etc. J and L are gone, Porter is 44 or so and taking deliveries….Flair is down to 19 or 20…and with none on order from Boeing, massive competition from Ryanair, Easyjet and others for any Max, it’s unlikely Flair can win any bidding war with a lessor for new tails. There is a good supply or older 737’s, however a Canadian dollar in free fall will make any leases, parts and maintenance more expensive and potentially less trans border traffic as the dollar takes it toll. Domestic is summer and holidays. The pie simply isn’t that big.

I did catch a rumour that Flair might start looking to expand with NG’s. Max’s are expensive and wait lists are long.

If they stick to the niche market they have AT 20 tails I do think they might be ok. But any form of expansion will be the final nail in the coffin for Flair.

[Blackdog0301]

Don't mean to be rude, but you'd be out of your mind to consider Flair a career option. They have been circling the drain for a long time, and anyone still working there knows it's only a matter of time. It'll happen suddenly and without warning too, just like Lynx. Then you'll be among hundreds of other pilots scrambling for a job. Don't put yourself in that position.

Agreed. Anyone there now leave on your terms ASAP imo. WJ, POE OR AC are all great long term options. The pay cheque will not matter if the company ceases. You risk starting all over again at the bottom of a seniority list - leave now and start building a seniority base somewhere solid. Only strong balance sheet companies will survive. We are still in high interest rate environment. Baystreet and Wallstreet only care about sustained profitability over the long term. Pilots please put your business hat on not your pilot one.

Oh dear, imagine saying no to a 737 offer letter. It'll hurt then and IF Flair sticks around for a year or two... but 100 times worse when you reject a solid offer and end up with none...

If Flair is the only offer you can muster, you've got bigger problems.

[Maurice]

…in this business economy of scale is so tremendously important…Jetlines, Lynx, Flair and Porter all said they’d have 50 tails etc etc etc. J and L are gone, Porter is 44 or so and taking deliveries….Flair is down to 19 or 20…and with none on order from Boeing, massive competition from Ryanair, Easyjet and others for any Max, it’s unlikely Flair can win any bidding war with a lessor for new tails. There is a good supply or older 737’s, however a Canadian dollar in free fall will make any leases, parts and maintenance more expensive and potentially less trans border traffic as the dollar takes it toll. Domestic is summer and holidays. The pie simply isn’t that big.

I did catch a rumour that Flair might start looking to expand with NG’s. Max’s are expensive and wait lists are long.

If they stick to the niche market they have AT 20 tails I do think they might be ok. But any form of expansion will be the final nail in the coffin for Flair.

I can't imagine any lessor wanting to do business with them after suing their previous lessors after a rightful repossession.

[rookiepilot]

Profit at this point is irrelevant. They are a young airline and investors want to see a scalable business.

Really.

If that was so, they wouldn’t be begging for money, would they.

I think not.

[CaptDukeNukem]

Profit at this point is irrelevant. They are a young airline and investors want to see a scalable business.

Really.

If that was so, they wouldn’t be begging for money, would they.

I think not.

Exactly,

Nor would it take them this long to scrounge up some Benjamins.

[Canadaflyer46]

https://archive.is/2Etqc

A U.S. regulator has ordered insurance companies owned by a major Flair Airlines investor and lender to stop accepting money from new clients, citing the insurers’ poor financial conditions.
The Utah Insurance Commissioner issued the emergency order on Dec. 2 after a third-party financial audit revealed three insurers owned by Advantage Capital Partners held high-risk investments, were in dire financial states and held more than 10 per cent of their total investments in a single company, in violation of state law.
The audit found loans made to Flair by the insurers were almost worthless.
Advantage Capital Partners, led by Kenneth King and known as A-Cap, is a lender to 777 Partners, the Miami-based investor in Flair and European soccer teams that has seen some assets fall into bankruptcy this year amid several lawsuits.
In May, Edmonton-based Flair said 777 Partners was no longer its largest foreign investor and that a company related to 777 had acquired its shares. Flair has declined to name the new investor, but a person familiar with the matter said it is Advantage Capital Partners, which took over the 777 investments. The Globe and Mail is not identifying the person because they were not authorized to speak publicly about the matter.
The Utah order covers three of five insurance companies owned by Mr. King’s A-Cap and prevents the Utah-based companies – Sentinel Security Life Insurance, Haymarket Insurance and Jazz Reinsurance – from writing new policies in 2025, though it does allow renewals. The companies were using cash from new policies and liquidating assets to pay for financial obligations, the regulator says.
“The [insurance] companies have been and are in a hazardous financial condition,” the regulator’s order says. “With negative capital and surplus in the hundreds of millions of dollars, the companies’ admitted assets are less than their liabilities.”
The regulator found the “valuation of loans that the companies made to Flair Airlines indicate that the expected recovery for the Flair loans is approximately zero to eleven cents on the dollar.”
It issued the emergency order to cease new business while conducting regular examinations of the companies, which continue. The companies disagreed with the auditor’s finding, the order says.
Mr. King was not available for an interview or to answer e-mailed questions Wednesday, a representative said. Flair did not respond to e-mailed questions.
Bloomberg reported in November that Flair is seeking US$150-million in financing. The search for a cash injection follows a few turbulent years for the discount airline.
Since A-Cap’s arrival as an investor, the confidential source said, Flair has taken steps to ensure its longevity, hiring Sumanth Rao, a former Delta Airlines executive, as chief financial officer. Chief operating officer Maciej Wilk was promoted to interim chief executive officer, replacing Stephen Jones. Josh Wander and Steven Pasko, 777′s founders, are no longer on Flair’s board of directors, according to company filings.
The Globe reported in January that Flair owed the federal government more than $67-million in taxes related to the importation of aircraft. A court gave the government the right to seize and sell Flair assets, and the airline said it reached a repayment deal with Ottawa. Other hurdles Flair has faced include a regulatory review of 777′s control and the 2023 repossession of four aircraft for late lease payments.

[cdnavater]

Yes, but they are still hiring, everything must be ok, nothing to see here folks!
Edited to add eye roll, two posters did not understand sarcasm

[Dronepiper]

Lynx was also hiring and onboarding people the same day they announced they' were ceasing operations

[Tbayer2021]

Lynx was also hiring and onboarding people the same day they announced they' were ceasing operations

cdnavater was being sarcastic.

[cjp]

Right before Christmas. It seems everytime I think that company is finally going under, it breathes another gasp - and they continue onwards.

Such a crazy situation they are in, and the flight crew seem quite content to sit and wait.

I hope it all works out for them, more competition in Canada is always better.