Flair Airlines’ CEO says he’s confident his ultra-low-cost airline is ready to take advantage of the summer travel boom after satisfying regulators that it’s Canadian enough to fly.
But even as its chief executive concedes to Global News there’s room for improvement, analysts say headwinds facing the aviation industry like soaring fuel prices could actually bode well for the embattled airline.
Flair spent much of the spring season trying to prove that the Edmonton-based airline was Canadian enough after the country’s transportation watchdog said in an initial ruling on March 3 that it might be in violation of rules limiting foreign ownership.
But after Flair overhauled its board of directors and made a series of governance changes to limit the influence of one of its major U.S.-based investors, the Canadian Transportation Agency (CTA) ruled on June 1 that the airline indeed met the letter of the law to keep flying.
“Flair is a Canadian airline, full stop,” CEO Stephen Jones told Global News in an interview this week.
While the CTA’s final ruling landed in Flair’s favour, the agency confirmed to Global News on multiple occasions that if its review found Flair did not meet the standards of Canadian ownership, its licences to fly would be revoked.
That led to uncertainty in the eyes of some analysts and consumers as to whether Flair would be able to fulfill bookings for summer travel.
While he maintains Flair’s Canadian status was not in doubt internally, Jones said the months of speculation opened the door for the airline’s competitors to cast aspersions.
“I think that our competitors made some good use of the fact that the questions were being raised. There was a lot of misinformation put around and it resulted in uncertainty for customers, I think unfairly, but it is what it is. That’s behind us now,” he said.
Gabor Lukacs, president of consumer advocacy group Air Passenger Rights, told Global News that while the investigation itself might’ve been legitimate, he agreed that the way it was communicated often cast Flair in an unflattering light.
He said the release of redacted documents related to the investigation rather than original copies, vague wordings and the overall lack of forthright communication after the CTA’s preliminary findings in March failed to promote trust in the probe.
“It was not a transparent process, but more something that would create innuendo, that would create mistrust,” Lukacs said.
“This doubt about their Canadian-ness has caused some harm prematurely and in an unwarranted way.”
Flair has more work to do
While Lukacs found some parts of the CTA investigation unfair to Flair, that doesn’t mean the airline is perfect.
The growing carrier has made a name for itself marketing low-cost fares and serving medium-sized markets but is a frequent source of irritation on the APR Facebook group, where Lukacs advises consumers on how to navigate disputes with airlines.
“Although they are a small carrier, they are a large source of complaints,” he said of Flair.
The bulk of these complaints come down to “reliability of service,” Lukacs said.
A common source of ire with Flair is canceling flights and not rebooking passengers on other airlines — an optional practice on domestic routes but something enshrined in federal law when it comes to trips with international legs.
Flair’s not the only operator that doesn’t promptly rebook flights to other airlines, but Lukacs said it’s often easier for larger players like Air Canada or WestJet to get away with it because they can book passengers on a flight within their own networks the next day.
“I’m hearing a lot of complaints about people booking a flight (with Flair) for a given day, getting cancelled and then being offered a flight three, four, five or seven days later. That’s unacceptable. That is unreasonable,” he said.
Global News asked Jones about not promptly rebooking passengers and service reliability concerns.
“We’re not perfect, that’s for sure,” he said. “We’ve all got issues. All airlines do.”
But Jones insisted Flair is “investing a lot” in its customer service, ramping up hiring to quadruple the size of the team in recent months and leaning more into automation to speed up processing times.
He added that rebooking onto other airlines is “not part of the contract” that Flair makes with its customers, but asserted that doesn’t mean passengers should feel stranded.
“You know we’ll do our best to get you there. If we do need to cancel we will absolutely refund our fares,” Jones said.
Lukacs added that while Flair has more work to do, it’s by no means the only offender in the Canadian aviation industry; unreliable service is a sore point for air passengers across Canada, regardless of which carrier they booked.
“Yes, Flair has all these issues, but it’s not just Flair,” Lukacs said.
“We have to be careful not to pick out one player as, ‘OK, this is the bad guy,’ when the other players around are not saints, either. They’re very far from it.”
Flair could stand out as airfare rises: analyst
Higher fuel costs are cutting into the bottom lines of airlines across the globe at the same time that easing COVID-19 restrictions are opening the floodgates to years of pent-up travel demand.
George Ferguson, senior aerospace and airline analyst at Bloomberg Intelligence, told Global News that while higher expenses are a challenge for any operator, ultra-low-cost carriers like Flair might nonetheless be well-suited to take more market share as inflation soars.
“With higher fuel prices, I think consumers are going to be very much looking for better deals to travel,” he said.
“Airlines like Flair, if they can really keep costs low and offer much cheaper ticket prices to consumers, I think that means they’re going to get a lot of demand. And so I think the prospects are very good for airlines like Flair.”
Jones, who worked in the oil and gas industry before making a career in aviation over the past 25 years, said these are the highest fuel costs have ever been during his tenure, and that’s creating pressure across the industry.
He touted Flair’s aircraft as being more fuel-efficient than massive jetliners as one upside that helps the airline keep costs lower than competitors. He also suggested that flights along shorter routes might become more popular than driving the same distance as consumers grapple with the surging costs to fuel up their vehicles.
“We’re really well-positioned for that,” he said.
Flair has ambitious expansion plans including scaling up its current fleet of 15 jets to a crop of 50 by 2025. That’s faced some hiccups already, however, with the airline suspending service to Regina earlier this month due to “aircraft delivery delays.”
Jones cited demand for Flair’s affordable airfare as giving him confidence the company will achieve its fleet plans in the coming years.
The peak summer travel season came with another shakeup earlier this week as WestJet announced a new strategy focusing more on its roots serving western Canada and maintaining a few connections to the east.
The Calgary-based airline also said it would redouble its focus on low-cost fares through its subsidiary Swoop, a move Ferguson views as a response to Flair’s green light to keep flying this summer.
“The fleet changes appear designed to simplify operations to keep down costs so they can be competitive against carriers like Flair,” he said in a follow-up email to Global News on Thursday.
Ferguson said he thinks WestJet will continue to compete against Air Canada on some routes but the low-cost carrier model works best when focused on “important leisure markets” with high demand where airlines “can fill airplanes and maximize profit.”
“WestJet is a high-fare, high-cost airline so it doesn’t surprise me they are in full retreat in key Canadian markets,” Jones said when asked for comment on the rival Alberta carrier’s shift in strategy.
Global News reached out to WestJet for comment on Ferguson’s analysis but did not hear back by publishing time.
WestJet CEO Alexis von Hoensbroech did write in a blog post announcing the shake up on Thursday that the airline’s new strategy is, in part, focused on meeting demands for “leisure travellers.”
“WestJet’s low-cost roots have been the foundation of the historical success of our company. As we realize our ambitious growth plans, we will bring more air service to Canadian communities and connect more people to what matters most, through friendly and affordable air travel,” he wrote.
— with files from Global News’s Anne Gaviola