The headwinds keep blowing against the nose of Edmonton-based ultra-low-cost carrier Flair Airlines.
The relative newcomer to the Canadian aviation industry first took flight in 2017, and has since attempted to disrupt the industry by offering travellers rock-bottom prices and by flying routes to less-serviced airports.
Alas, after recent revelations regarding the airline’s need to settle a massive tax bill, it appears that all is not well at Flair.
Let’s take a look at whether Flair’s ultra-low prices have put them at an ultra-high risk of turbulence in 2024 and beyond.
Flair Airlines Faces a Hefty Tax Bill
Recently, it was revealed that Flair Airlines owes the Canada Revenue Agency (CRA) a whopping $67 million (CAD) in unpaid taxes related to import duties on 18 Boeing 737 MAX 8 aircraft.
Worse still, the CRA received a court order in November 2023 to take drastic action, if needed, to settle the debts. These actions are listed as including, but limited to, the seizure and sale of Flair’s assets, which could include aircraft in its fleet.
In response, Flair Airlines has reported that it has come to an agreement with the CRA to pay the taxes; however, the exact terms of the repayment plan are confidential, and haven’t been reported by either party.
Flair also tweeted to remind passengers that none of its property has been seized, and that there has been no impact to its daily operations.
We want to address today’s media coverage and be clear that the Government is NOT seizing flair property & this situation does not impact our daily flight operations. We will continue to fly and look forward to serving you now and in the future • #flyflair #flyaffordable pic.twitter.com/dXgjDgyeq8
— flair airlines (@flairairlines) January 30, 2024
These developments come less than a year after Flair had four of its planes seized due to unpaid debts.
For now, Flair appears to be shifting its focus away from growth and more towards stability by increasing passenger loads, curtailing unprofitable routes, and raising overall revenue to maintain operational expenses while also repaying the CRA.
Previously, Flair had plans to expand its fleet from 20 to 26 Boeing 737 MAX 8 aircraft in 2024; however, that has been put on hold until at least 2025.
Last week, Flair published a number of changes to its schedule, which included seasonal service on some routes ending earlier than planned, making…