Flair Airlines is looking for partners to inject fresh capital into the discount carrier in order to “restructure” its finances and build out its fleet.
Eric Tanner, vice-president of revenue management and network planning, said the company is hoping for partners to buy into the business as a way to deal with pandemic-era debt and allow the company to acquire jets beyond the 20 planes it now flies.
“What we’re really looking at is restarting our growth ambitions and finding strategic equity partners who are going to help us get onto that level,” Tanner said in an interview.
“There’s work underway, amongst investors, to restructure the balance sheet.”
He was quick to add that the investor hunt is not a “pressing need” and the business itself is not undergoing restructuring, having turned a profit in July and August.
“The business is in frankly the best shape that it’s been in, from a performance perspective,” he said.
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Tanner attributed the boost in part to a thinning out of competition over the past year.
Budget carrier Lynx Air collapsed in February and filed for creditor protection, while WestJet’s ultra-low-cost subsidiary Swoop shut down in October last year.
Flair has confronted its fair share of financial turbulence since its inaugural flight took off in 2017.
As of November, it owed the federal government $67.2 million in unpaid taxes related to import duties on the 20 Boeing jets that make up its fleet.
Then-CEO Stephen Jones told The Canadian Press in January he was suspending expansion plans as Flair contended with plane delivery delays and significant debts.
Last year, Flair saw four of its planes repossessed after an aircraft leasing manager claimed the company regularly missed rent payments that amounted to millions of dollars. Three of those Boeing 737s now fly for Ethiopian Airlines, while a fourth is in the hands of Johannesburg-based FlySafair.
“In terms of like the balance sheet, there’s some legacy stuff from the past four years where Flair grew very rapidly and did not receive any government support during COVID,” Tanner said.
“That frankly just needs to get cleaned up so that we can turn the page.”
The airline’s preference would be for Canadian financial partners, he said. Federal law caps ownership of a Canadian airline by foreign entities at 49 per cent.
This report by The Canadian Press was first published Aug. 28, 2024.
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