Discount upstart faces steep challenge in airspace dominated by two giants
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Flair Airlines Ltd. is clearly relishing this moment. The upstart carrier prevailed in a recent ruling by Canada’s aviation regulator that deemed the company sufficiently Canadian to continue flying domestically. Flair responded with a flash seat sale, discounting fares by 50 per cent, and let loose a blast of triumphant tweets: “We’re here… still,” the company cheekily wrote. “Blue skies ahead.”
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It wasn’t obvious a few months ago that Flair would still be flying this summer.
The discount carrier’s future looked anything but assured in April when it became clear that an investigation by the Canadian Transportation Agency (CTA) had raised serious questions about the airline’s relationship with its American backer, private-equity firm 777 Partners Ltd. The CTA first suggested in March that Flair could be in violation of Canadian foreign ownership rules, and, as a result, faced the potential loss of its operating licence.
In the intervening weeks, Flair scrambled to overhaul its shareholder agreement, stripping 777 of unique veto rights and pledging to boost the number of Canadian directors on its…