Flair won't have assets seized despite owing $67 million in unpaid taxes, says CEO
The CEO of Flair Airlines is attempting to clear the air after news broke earlier this week that the company owed $67.2 million in unpaid taxes.
As The Globe and Mail first reported, Flair’s owing amount was connected to import duties on 20 Boeing 737 planes that are part of its fleet.
Flair’s unpaid taxes prompted the Canada Revenue Agency (CRA) to obtain an order to seize and sell the carrier’s property.
Flair’s CEO, Stephen Jones, told Daily Hive that the airline does owe that amount but has an agreement with the CRA to pay back the money “on a fixed series of monthly payments.”
“We’ve been making them regularly since we struck the agreement last year,” he stated.
Jones said that what may have been misconstrued to the public was that Flair Airlines would have its assets seized.
“I think that was unfair to our customers and to the public generally because it causes concern unnecessarily,” he told Daily Hive.
“We’ve been operating under this arrangement for months now.”
Flair customers do not need to worry: CEO
In a statement to Daily Hive, the CRA said that it cannot comment on taxpayer information related to specific cases.
“The CRA’s collection policy is to resolve issues in a mutually satisfactory way. We work with taxpayers to develop suitable payment arrangements based on their ability to pay and to resolve their arrears with the Crown before garnishing or taking any other legal action,” said a CRA representative.
Ross Howey Photo/Shutterstock
Jones said he could not disclose further information about Flair’s payment plan with the CRA.
When asked if customers had anything to be worried about regarding Flair’s future, Jones was brief in his reply: “No, they don’t,” he said.
Not the first time Flair has landed in hot water
Four of Flair’s leased aircraft were seized in March as part of a commercial dispute between the airline and its lessor.
The leasing manager, Airborne Capital, alleged that Flair was missing regular rent payments. Flair launched a $50 million countersuit, claiming that Airborne Capital Inc. and three other affiliated leasing firms “secretly” found a better deal for the Boeing 737 Maxes with a third party.
Jones said the case is still “with the courts,” and Flair considers the leasing firms’ actions “unlawful.”
“We’re looking forward to having our day in court, getting some of the facts of that story out, and having our claim heard,” Jones added.
When asked about Canada’s budget airline space — with new players like Porter and Lynx recently entering the market — Jones said he’s not worried about keeping up with the competition.
“I think it’s about them trying to keep up with us, actually,” he remarked.
Pause on growth
Flair Airlines is pressing pause on plans to expand its fleet this year. Jones acknowledged that Flair wanted to add six more Boeing aircraft to its current fleet of 20.
Due to delays with Boeing, those planes — which were supposed to be delivered in spring — have been pushed to arrive in the fall, which Jones said “is a low part of the season.”
“It’s not a great time to be growing, and so we’re taking this year… for muted growth.”
Flair has recently touted its success, stating that it was the #1 airline in Canada for completion factor in 2023 and the second most on-time airline in Canada.
However, the airline hasn’t been immune to customer complaints.
Canadian Transportation Agency
Last summer, the Canadian Transport Agency released data on air travel complaints by the airline from April 2022 to March 2023, revealing that Flair received the most complaints out of any airline in Canada during that time.
According to the CTA, the carrier received an average of 15.3 complaints for every 100 flights between April 2022 and March 2023.
Follow Channels and Categories