Canada’s airline industry calls on Ottawa to reject Flair exemption

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Members of Canada’s airline industry are asking the federal government to reject Flair Airlines Ltd.’s request for a temporary exemption of the Canadian ownership requirement.

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“If granted, this unprecedented request would allow Flair to continue operating outside the bounds of existing Canadian law, setting a troubling precedent while also threatening 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,” the National Airlines Council of Canada and the Air Transport Association of Canada said in a joint statement.

Together the two groups represent Canada’s major airlines — Air Canada Inc., WestJet Airlines Ltd., Transat A.T. Inc. — smaller and freight carriers and aviation industry suppliers.

Flair is facing an investigation by the Canadian Transport Agency over whether it meets the requirements for Canadian ownership. Under the Act, at least 51 per cent of a company’s voting interests must be Canadian, and no more than 25 per cent of voting interests may be held by a single non-Canadian company or person.

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At issue is Miami-based 777 Partners, which has a 25 per cent stake in Flair, leases the airline its planes and has members on its board.

The Edmonton-based Flair, which has until May 3 to answer the agency’s preliminary findings or potentially have its licence suspended, has asked for an 18-month exemption to address the issue.

But the aviation industry groups argue that the Canadian control law is important to ensure that airlines are committed to the country and will not pull up stakes and leave passengers stranded, especially at a time when airlines are trying to rebuild traveller confidence after the pandemic.

“Allowing Flair’s continued operation outside of longstanding, clear laws would set a dangerous precedent for those in aviation, business, and most importantly, Canadian consumers,” said the statement.

“Domestic control and ownership is not just a ‘nice to have’, it is a necessary underpinning of the system, and should be defended. It ensures that there is fundamental fairness and protects against one diluted or foreign owned business causing harm to the competitiveness of the whole industry.”

The possibility that Flair could see its licence suspended has had Canadians who have booked tickets on the airline taking to social media worried about their flights.

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The two groups calling on the government to reject Flair’s exemption say their member airlines stand ready to “mitigate the impacts on travellers and workers” if the airline is forced to shut down.