Well that was a good run...

[JungleRiot]

https://www.theglobeandmail.com/busines ... e-flights/

[fixnfly]

https://www.theglobeandmail.com/busines ... e-flights/

Post the article if it's behind a paywall next time. Maybe try to avoid misinformation through vague titles, they're not done yet.


Flair Airlines cuts over 600 flights as it faces multimillion-dollar financial woes

Flair Airlines has reduced its spring schedule by more than 600 flights, making cost-saving cuts to its domestic network even as it adds holiday routes after the failure of low-cost rival Lynx Air.

Flair eliminated a number of flights departing its major hubs, including Toronto, Ottawa, Calgary and Edmonton, for March, April and May, according to Cirium, an aviation data company. The Edmonton-based no-frills carrier has also added flights to Florida, Mexico, Las Vegas and other resort destinations.

Flair’s discount rival, Lynx Air, ceased flying on Feb. 26 and is under court-granted protection from creditors. The nine-plane airline said it could not pay for its daily operations and will wind up the business or be sold in a court-supervised process under the Companies’ Creditors Arrangement Act.
The recent changes in the discount segment precede what is expected to be a busy summer travel period for Canada’s airlines. The industry has enjoyed healthy demand and higher airfares since COVID-19-related restrictions were lifted.

Flair’s schedule changes come as the airline faces a tax repayment bill worth $67-million, a move by a financial services company to hold back $25-million in customer receipts, in addition to a sharp credit-rating downgrade of Flair’s U.S. shareholder’s reinsurance unit, which is a lender to Flair.
Overall, Flair has slashed its schedule for March, April and May by about 8 per cent, the airline confirmed. Rivals Air Canada, WestJet Airlines and Porter Airlines, meanwhile, have all boosted the number of scheduled flights for the same months by about 6 per cent, according to Cirium.
Eric Tanner, Flair’s vice-president of revenue management and network planning, said the airline made the cuts to reduce flights in a crowded market, and is focusing on longer, pricier domestic routes that better defray the high costs of landing at Canadian airports. The longer flights mean Flair, on an overall basis, has increased its capacity, measured by available seat miles, an industry gauge. As well, Flair added sun destinations in Mexico and the Caribbean after seeing strong demand last year, he said.

“Our [year-over-year] average fare for this period is substantially exceeding the increase in [flight] length,” Mr. Tanner said. “For March through May, we anticipate an improvement of over 50 per cent in our average base fare.”
John Gradek, who teaches aviation leadership at McGill University, said the airline has eliminated or reduced flying frequencies on poorer-selling routes that are costing it money to operate. “Spring break is over and they’ve got to be conserving cash,” Mr. Gradek said.
Flair Airlines CEO hopes to bid on some Lynx planes after shutdown scuttles deal

Flair’s route cuts come as it faces challenges on a few fronts:
A payment-processing company, Peoples Group, is withholding $25-million in transfers to Flair. The airline says the company, which acts to protect consumers who have prepaid for services, is acting unjustly. “We will pursue resolution through legal channels,” Flair chief executive Stephen Jones said in a statement.

Peoples Group declined to answer questions specifically about Flair. In an e-mail, Peoples said it manages reserve funds that protect consumers when they deal with merchants that offer prepaid services, including airlines. It increases the amount in the fund according to the risk posed by a merchant. “Should a flight be cancelled and not rebooked by an airline and the airline cannot refund the money, cardholders are entitled to request a refund, or chargeback, from their card-issuing bank,” Peoples Group said in a statement, speaking generally. “When a chargeback is received, the airline’s payment acquirer [Peoples or another processor] must refund the purchase from a reserve account,” Peoples said, adding that its “underwriting team reviews the risk associated with each one of our merchants and determines the right reserve required to match the risk.”

Flair owes $67-million in tax repayments to the federal government for aircraft imports, and says it is making payments on the amount. A court granted Ottawa the right to seize and sell Flair property worth the amount owed, but has not apparently done so.
The government has registered interests or liens on Flair’s Boeing 737 flight simulator, unspecified Flair real estate and “all of the debtor’s present and after-acquired” personal property. Flair says the interests are related to the tax bill. The Canada Revenue Agency declined to comment.
Alberta’s property registry shows about 25 liens on Flair aircraft and other assets have been made or amended since 2022. The assets include leased aircraft, a spare engine, forklifts and blanket claims on all Flair property. Aircraft leasing companies in March, 2023, seized four Flair aircraft for missed rent payments over several months. Mr. Jones has said U.S. investor 777 Partners paid the arrears on another seven aircraft, which Flair retained.

Mr. Jones, in an e-mail, said the Alberta registrations are standard practice. “Just like any other airline, Flair has security agreements on its aircraft and equipment pursuant to leasing agreements. These security agreements are a common practice and do not impede our ability to operate efficiently,” said Mr. Jones, who was unavailable for an interview on Wednesday and Thursday.
Alfonso Nocilla, a law professor at Western University in London, Ont., said leasing companies and creditors typically register their interests in properties when a deal is made, while others might do so to ensure they are viewed as secured creditors.
“The registry exists to give notice to anyone else in the world that you have a security interest in the property that’s covered by that registration,” Prof. Nocilla said.

Flair says it’s managing its finances.
“Customers can be assured that Flair remains dedicated to fulfilling tax obligations, managing financial responsibilities, and providing affordable, accessible air travel options, guided by principles of compliance, stability and transparency,” Mr. Jones said in a e-mail.
A major U.S. investor in Flair, meanwhile, is fielding its own challenges. Flair is 25 per cent owned by 777 Partners LLC, a Miami-based private equity company.

New York-based credit-rating agency AM Best has downgraded 777 Partners’ insurance arm, 777 Re Ltd., twice since November, from “excellent” to “weak.” AM Best cited Bermuda-based 777 Re’s ability to meet its financial and insurance obligations, its “weak” balance sheet and exposure to “illiquid” affiliated private investments.

Those related-party investments include several European soccer teams and Flair Airlines.
777 Partners’ stable of soccer teams includes Genoa CFC, Sevilla Futbol Club, Hertha Berlin, Standard Liege and Vasco da Gama. Its proposed purchase of the Everton Football Club in Britain is awaiting approval from the Premier League.
When asked how Flair is affected by 777’s situation, Mr. Jones said the airline “maintains the full support of our financial backers, and we remain steadfast in our commitment to providing competitive services in the market.”

A 777 Partners spokesperson declined to comment.
AM Best said 777 Re is working with the industry regulator, the Bermuda Monetary Authority, to reduce the company’s exposure to the affiliated assets. As a reinsurer, 777 Re sells policies to insurance companies looking to reduce their own risks. Typically, a reinsurance company invests in assets seen as stable and secure. Soccer teams and airlines are known for their financial volatility. Bermuda offers reduced regulation and is home to many reinsurance companies.

The reinsurance division of privately held 777 Partners is a significant lender to Flair Airlines, with credit totaling US$58-million in 2022 and US$37-million in 2021, according to 777 Re documents filed with the Bermuda Monetary Authority. Investments in entities related to 777 Partners totalled US$1.4-billion in 2022.

AM Best said its ratings downgrades “reflect 777 Re. Ltd.’s balance sheet strength, which AM Best assesses as very weak, as well as its marginal operating performance, very limited business profile and weak enterprise risk management.” AM Best and the Bermuda Monetary Authority declined to comment further.

Companies with poor ratings are viewed as riskier than average investments, and typically must borrow money at higher interest rates.

[ready]

They didn’t cut any flights. They are flying the spring schedule as planned, back in August.

[co-joe]

More WestJet misinformation being spread through their politburo (the globe and mail).

Flair hasn't cut any flights at all, let alone 600 of them. Not one.

[Realitychex]

Flair operated 371 sectors the week of Feb 4th with an asl of 1,412 miles.

They operated 530 sectors the week of Mar 17th with an asl of 1,378 miles.

What’s gonna happen the week of April 7th when the March break / Easter travel bump ends?

Flair's enjoying the best 4 weeks they'll see till about June 21.

The CRA monthly tab jumps from $400k a month to $1.6m in April.

Their credit card processor is holding back $25m.

They've been unable to take in any revenue for almost 48 hours that's cost them at least $6m in advance bookings.

Suppliers are getting testy about payments in arrears.

777 is mired in its own problems.

And lest anyone forget, 2Q was always WS’s weakest quarter, and it begins in 8 days.

If that's what happens in a good month, Lord know's what's gonna happen in the next two wretched months.

[double-j]

More WestJet misinformation being spread through their politburo (the globe and mail).

Flair hasn't cut any flights at all, let alone 600 of them. Not one.

Can you point out exactly where in this article any information or comments came from Westjet?

[co-joe]

More WestJet misinformation being spread through their politburo (the globe and mail).

Flair hasn't cut any flights at all, let alone 600 of them. Not one.

Can you point out exactly where in this article any information or comments came from Westjet?

Do I really need to? WestJet spends 30 Million dollars a year on advertising, they can get anybody to run any story they want about their perceived competition.

[Oleo 4]

More WestJet misinformation being spread through their politburo (the globe and mail).

Flair hasn't cut any flights at all, let alone 600 of them. Not one.

Can you point out exactly where in this article any information or comments came from Westjet?

Do I really need to? WestJet spends 30 Million dollars a year on advertising, they can get anybody to run any story they want about their perceived competition.

Amazing how you know what is spent on a line item from a private company. If you make accusations then you should be able to back up your statements. You drove the SWA 350 a decade ago didn’t you?

[boeingboy]

More WestJet misinformation being spread through their politburo (the globe and mail).

Flair hasn't cut any flights at all, let alone 600 of them. Not one.

Can you point out exactly where in this article any information or comments came from Westjet?

Do I really need to? WestJet spends 30 Million dollars a year on advertising, they can get anybody to run any story they want about their perceived competition.

Yea - That's right - blame it all on Westjet.

Just like the repossessions were all WestJet's fault too.

[CaptDukeNukem]

Can you point out exactly where in this article any information or comments came from Westjet?

Do I really need to? WestJet spends 30 Million dollars a year on advertising, they can get anybody to run any story they want about their perceived competition.

Amazing how you know what is spent on a line item from a private company. If you make accusations then you should be able to back up your statements. You drove the SWA 350 a decade ago didn’t you?

[co-joe]

SWA? You mean Sunwest? I flew their BE3B almost 20 years ago, your point being?