After months of uncertainty, ultra-low-cost carrier Flair Airlines can move ahead with confidence, after the Canadian Transportation Agency declared that it meets the standard to be considered Canadian.
CTA regulations state that to be considered Canadian, an airline must be at least 51% owned by Canadians, with no single foreign entity owning more than 25%. Foreigners are also forbidden from exerting "control" over airlines designated as Canadian.
Back in April, the CTA released a preliminary determination that Flair could be in violation of Canadian control rules. A U.S.-based company, 777 Partners, owns 25% of Flair - which wasn't a problem - but Flair's five-person board of directions included three Americans who either own part of 777 Partners or worked for the company. Since then, Flair has expanded its board of directors to nine members and 777 only represents two of those positions.
The new ruling reflects the CTA's determination that Flair's changes are enough to meet the standard.
"Flair is Canadian," said President and CEO Stephen Jones in a press conference following the release of the CTA ruling. "This decision only cements that Flair is here to stay."
To celebrate the victory, Jones announced a 50% off sale on airfares for the next 48 hours.
In its final ruling, the CTA said Flair has demonstrated its independence, not only through the changes to the makeup of its Board of Directors, but also by showing that it can generate a positive cash flow from operations, so that it won't be dependent on 777 Partners for new financing.
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