Canadian Press reports that Flair Airlines is putting the brakes on its expansion plans, after it was revealed that it owes the federal government $67.2 million in unpaid taxes, prompting the Canada Revenue Agency to obtain an order for the seizure and sale of the carrier's property.
The money owed to the government relates to unpaid import duties on the 20 Boeing jets that make up the airline’s fleet
Stephen Jones, CEO Flair Airlines. (Photo Credit: Flair)
“This is a tough industry," CEO Stephen Jones told CP. "The development of the financial performance will take some time." Jones stressed that the Federal Court order obtained by the CRA in November has no impact on the carrier's operations, and the company is working to settle the debt through monthly payments.
However, Jones says the low-cost carrier is putting expansion plans on hold as it contends with debts and aircraft delivery delays.
As recently as fall 2023, the Edmonton-based company planned to boost its fleet to 26 Boeing 737 Max jetliners this year. That won’t happen, with Flair partly blaming delivery delays from Boeing, which has faced safety scrutiny from regulators, most recently after a dramatic midflight incident that grounded 737 Max 9 jetliners for weeks.
Flair's brand ambassador Kenny Macintyre celebrating the recent launch of flights linking Toronto and Kingston, Jamaica. (Photo Credit: Bruce Parkinson)
The court order from November 23, first reported by The Globe and Mail, allows the "Sheriff of Alberta or any civil enforcement agency" to seize and sell Flair's property and assets. The CRA has indicated that this would only occur as a last resort.
Flair has face a rocky growth trajectory over the past few years, first having to make changes to meet Canadian ownership regulations, and then seeing four of its planes repossessed in the middle of the night last March by an aircraft leasing company.
Flair’s operational performance has improved in recent months, with higher flight completion rates and improved on-time arrivals, but it faces still competition from budget rival Lynx Air, fast-growing Porter Airlines and WestJet, which has put increased focus on routes from western Canada. Flair is also duking it out with Sunwing Airlines and Air Transat on popular winter routes to the sun.
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