AN UNUSUAL DISPUTE: Four Flair aircraft seized by Leasing company
On Saturday Flair Airlines had four Boeing 737 MAX 8s seized by its leasing company at three Canadian airports, Toronto, Edmonton, and Waterloo. Leasing companies seizing aircraft is highly unusual. A statement from the air carrier called the move by “a New York-based hedge fund” to take the aircraft “extreme and unusual.” It said Flair would use additional fleet capacity” to lessen the effect on passengers, adding it did not foresee any major disruptions to its route map.
Company spokesman Mike Arnot said a number of Flair flights were cancelled Saturday morning, but the company had three spare aircraft to backfill those flights.
Arnot says passengers travelling over the next 72 hours would either be accommodated on Flair flights or another airline at Flair’s expense if a Flair flight wasn’t available.
An unnamed source quoted in the media suggested that Flair was just days behind schedule on a $1 million aircraft lease payment to the leasing company, Airborne Capital. However, leasing companies seizing aircraft is highly unusual, and is typically only done as a last resort. Sources say that it would be unusual for a leasing company to seize aircraft if an airline were just days late on a payment.
“We are truly very sorry passengers were impacted today, and are taking steps to get them on their way with minimal disruption. This includes repositioning our spare aircraft to support operations,” Flair’s statement said.
In a Tweet Flair referred to “service disruptions”:
An update from the company added that customers could also rebook their own travel and receive a reimbursement within seven days.
“We are truly very sorry passengers were impacted today and are taking steps to get them on their way with minimal disruption. This includes repositioning our spare aircraft to support operations,” the company’s statement said.
Flair’s statement said the airline has been involved in “ongoing communications” with the leasing company and “payment has been initiated.”
“Flair Airlines will continue to engage in a consensual mediation with the lessor to remedy the situation,” the statement said.
Flair Airlines launched in 2004 as a charter airline and began offering regularly scheduled service in 2018.
The low-cost, Edmonton-based airline announced in September it planned to become Canada’s third-largest domestic airline by this summer and expand its fleet to 30 aircraft by the end of 2023, serving 70 routes.
It has faced obstacles, including a months-long battle last year over whether its relationship with a Miami-based investor violated rules restricting foreign entities to no more than 49% ownership of a Canadian airline.
The dispute ended when the Canadian Transportation Agency ruled the airline was Canadian and could keep its licence, following Flair’s moves to rejig the composition of its board to ensure at least half the directors are Canadian and to end any unique shareholder rights by the investor.
Meanwhile, early last week, Flair released its fall-winter 2023 schedule, which adds several new routes as well as added depth across its network – notably to popular sunspots.
“Our network (will offer) more choice to more sun destinations than ever before,” said Flair Airlines President and CEO Stephen Jones.
New service is said to include:
• Toronto to Puerto Vallarta (beginning Oct. 29, 4x weekly)
• Kitchener-Waterloo to Puerto Vallarta (beginning Dec. 16, 3x weekly)
• Calgary to Las Vegas (beginning Oct. 30, 7x weekly)
• Calgary to Phoenix (beginning Oct. 30, 4x weekly), and
• Ottawa to Las Vegas (beginning October 13, 2x weekly)
The airline noted that existing service from Vancouver and Edmonton to Phoenix will move to Phoenix Sky Harbor International Airport for the season, along with the new service from Calgary to Phoenix.
Flair’s announced plans also included daily service on various routes, including Vancouver to Los Angeles and Toronto to Orlando.
Flair has a fleet of 18 aircraft, including 15 Boeing 737 MAX 8s and three Boeing 737-800s.
First published at Travel Industry Today