Discount company Flair Airlines may retain its license after the Canadian Transportation Agency concluded on Wednesday that the company “is Canadian”.
The Edmonton-based airline had been reviewed by the transportation regulator out of concern that a U.S. shareholder was exercising too much power.
The CTA said Wednesday that Flair “addressed the concerns raised in its preliminary determination.”
In response to the review, Flair added a rule that Canadian shareholders represent at least half of Flair’s board of directors and had to prove to the CTA that they would not be financially dependent on the US shareholder.
The investigation began in March.
To be a licensed domestic airline, Flair Airlines must be incorporated in Canada and at least 51 per cent of the voting shares must be owned and controlled by Canadians, according to the CTA.
According to Flair’s CEO, the company is incorporated in BC and 58% of the voting shares are owned by Canadians. In the spring, Stephen Jones said Flair’s unanimous shareholder agreement did not show Canadian control “explicitly enough”.
Concern revolved around Miami shareholder 777 Partners, which funded Flair’s day-to-day operations ahead of the COVID-19 pandemic, after filling most of Flair’s board seats and leasing planes to Flair. .
Although 777 Partners refused to control more than its minority share of Flair, the airline itself argued that the funding kept the company alive when it did not receive any ransom money from the Canadian government.
This is breaking news. More to come…