Flair Airlines CEO Stephen Jones is apologizing to passengers after four of its leased aircraft were seized on Saturday in Toronto, Edmonton and Waterloo, Ont..
The seizures were “unexpected and unwarranted,” Jones said during a media availability on Tuesday. The planes were seized by a New York hedge fund.
Jones said the disruption affected a little less than 1,900 people in the three cities. He said customers can have confidence in the Edmonton-based airline to fulfil its duties.
“We’re committed to being here for all Canadians, to keeping fares low, getting business now back to usual,” he said.
“There are airlines out there that don’t want Flair to exist, but we will fly and we’re going to thrive.”
Jones told reporters the airline is current on all its lease payments. If Flair can’t recover the aircraft, Jones said the airline will need to procure more or trim its summer schedule to fit.
“We were a few days late on a million dollars and to have this action taken is super unusual,” he said.
Jones said he believes the seizure was connected to the lessors’ conversations with “another airline” but remained tight-lipped on which airline he thought it was.
“As a lessor, the last thing you want to do is take back aircraft completely unexpectedly and then be stuck with them. It’s pretty clear they had somewhere else to put these aircraft,” he said.
Flair in the bigger picture
Airline analyst Ken Beleshko agreed that the seizure was unusual. But he added that airlines have other contracts that involve credit like with fuel contractors and ground handlers.
“[This] could set off a firestorm with other creditors if they see that there’s an issue with Flair not meeting their payments with the leaseholder,” Beleshko said.
Jones said other Flair partners have been supportive during this time.
Beleshko said that in the longer term, Flair’s viability is still up in the air. He said WestJet, for example, started off small and grew relatively slowly.
Flair Airlines, launched in 2017 as an ultra-low fare airline, already flies to multiple destinations in Canada, the United States and Mexico.
“Flair Airlines has evolved and developed probably too quickly and rapidly,” Beleshko said. “Their route structure is very ambitious and it demands an incredible amount of infrastructure to keep an operation like that going.
“The secret to success, I think, for an airline that wants to evolve as an ultra-low cost airline is that they’ve got to take it slow and they’ve got to keep it simple.”