Flair says it has payment plan
The Canadian Press - Jan 29, 2024 - Business Buzz

Photo: The Canadian Press

Flair Airlines owes the federal government $67.2 million in unpaid taxes, court documents show, prompting the Canada Revenue Agency to obtain an order for the seizure and sale of the carrier’s property.

The sum relates to unpaid import duties on the 20 Boeing 737 Max jetliners that make up the budget airline’s fleet, according to CEO Stephen Jones.

However, he said the Federal Court order obtained by the tax agency in November has no impact on the carrier’s operations, which have expanded over the past year and ramped up competition with rival airlines, and that the company has agreed to settle the debt.

“We have a mutually agreed-upon payment plan with CRA to pay these importation duties, and we are current with that plan,” he said in an emailed statement, adding that the terms of the deal are confidential.

The CRA said it cannot comment on specific cases for confidentiality reasons, but that it looks to make arrangements with companies “based on their ability to pay” before it takes further steps to recover the money.

“As a last resort, we may take additional legal collection actions such as seizing property or assets to protect the interests of the Crown,” said spokeswoman Kim Thiffault in an email.

The court order from Nov. 23, first reported by The Globe and Mail, directs the “Sheriff of Alberta or any civil enforcement agency” to seize and sell Flair’s property and assets.

The writ marks the latest chapter in a multi-year struggle to stay solvent and within regulatory lines, as the airline repeatedly crossed paths with the courts.

Last March, Flair saw four of its planes repossessed in the middle of the night after aircraft leasing manager Airborne Capital claimed that the company regularly missed rent payments that amounted to millions of dollars over the preceding five months.

In response, Flair launched a $50-million court action against Airborne and three other leasing firms, arguing that ongoing demands for payment from the four companies were “baseless.”

Flair has touted its achievements in recent months, claiming the top flight completion rate in the country at 98% and an on-time performance of 69%—weak globally, but solid compared with its Canadian competitors. It said it flew 296,000 passengers in December and 4.5 million in 2023, marking big gains from the previous year.

But the ultra-low-cost carrier faces increased competition from WestJet—newly retrenched in Western Canada even as the Calgary-based carrier wound down low-cost subsidiary Swoop in October—and from Porter Airlines and budget rival Lynx Air, both of which are expanding swiftly.

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