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Plane seizures a ‘significant blow’ to Flair as passenger frustrations grow

Click to play video: 'Frustrations grow over Flair Airlines’ cancellations'
Frustrations grow over Flair Airlines’ cancellations
WATCH: A developing drama unfolding at one of Canada’s low-cost air carriers. Flair Airlines is promising ticket holders they will either fly on its own planes or those of another airline, at Flair’s expense. That’s after four of the carrier’s leased aircraft were seized on Saturday, in what Flair is calling a commercial dispute. Global’s Nathanial Dove reports – Mar 12, 2023

March Break got off to a turbulent start for many Canadians who were supposed to fly Flair Airlines over the weekend after the ultra-low-cost-carrier cancelled flights due to what they say they were told were “maintenance” issues.

But those cancellations come amid what Flair has called a “commercial dispute” with a U.S.-based lessor that seized four of its planes over recent days. And while it’s not immediately clear if the cancelled flights were due to the planes being seized, one aviation expert says this latest development has heightened the level of risk in buying a Flair ticket.

“This scenario of getting airplanes seized and losing 20 per cent of your aircraft fleet is a significant blow to the credibility and to the brand that is that the fleet is trying to build in Canada,” said John Gradek, a faculty lecturer at McGill University in aviation and supply management.

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“You can still get a good deal, but … you’re taking some chances in terms of buying a ticket with Flair,” he added.

Click to play video: 'Flair Airlines has four airplanes seized after failing to pay the leasing company'
Flair Airlines has four airplanes seized after failing to pay the leasing company

Over the course of the COVID-19 pandemic, discount airlines, such as Edmonton-based Flair, Calgary-based Lynx and WestJet subsidiary Swoop, rapidly expanded across Canada.

Gradek said it’s a “very competitive” market, as the travel industry looks to rebound after pandemic restrictions, including some domestic competitors who may be eyeing Flair’s leases and considering paying more to the lessor to use the planes for their own fleets.

For example, he said that during the pandemic a lease for the kinds of planes Flair was using would likely run around $200,000 each per month amid a “glut” on the global marketplace.

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Click to play video: 'Where is the travel industry headed?'
Where is the travel industry headed?

Now, those same planes lease for around $400,000 a month, and for closer to $600,000 a month in the summer peak travel months amid a market that has become “a very different world.”

Flair, which markets itself as “Canada’s low fare airline,” was likely charging too low to cover the cost of leasing the airlines seized, said Gradek.

“They weren’t basically making enough cash flow, in my opinion, to cover off the costs of these leases.”

Now, Canadians who had their flights cancelled over recent days say they want answers.

Ontario couple Sadie Vanier and David Masson had a much-anticipated week-long holiday in the United States planned, but their flight on Saturday afternoon from Toronto to Palm Springs, Calif., got cancelled just when they were about to check in at the airport.

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Flair offered to rebook the couple from Markham, Ont., on another flight for March 25.

“We had this plan for a week … and it was packed with things to do and then they turn around and cancel and then offer us a flight for the 25th of March as some sort of compensation,” said Masson.

“It’s sort of laughable,” he told Global News.

They ended up spending almost triple the amount they had originally paid to Flair to book a one-way Air Canada flight for Sunday, said Vanier.

“Our March break plans are ruined and they aren’t showing one ounce of sympathy. There needs to be some accountability here.”

Click to play video: 'Halifax airport predicts busy spring break'
Halifax airport predicts busy spring break

Flair has offered to refund the couple and other customers who have been impacted, but the experience has left passengers “very disappointed.”

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“Sometimes, low price is just too good to be true, right?” said Masson. “And you get what you pay for, I suppose.”

Adina Wolodarsky and her family were also going to Palm Springs from Toronto on Saturday, but their Flair flight was cancelled because of what they were told were “maintenance issues”.

“They told us that the next flight would only be next Saturday, which we can’t do because of the March break,” said Wolodarsky, who is a teacher and mother of two.

The family from Maple, Ont., had to spend an extra $5,000 to rebook with Air Canada as well as pay out of pocket for an overnight stay at a hotel near Toronto Pearson.

Wolodarsky said she will never fly Flair Airlines again after this.

“We look forward to these vacations … so it’s like a big disappointment,” she said.

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In a series of tweets Saturday, the airline said it was “very sorry” for the service disruptions at the Edmonton, Toronto and Waterloo, Ont., airports.

“We sincerely apologize for this disruption, especially during a busy travel weekend,” Flair said.

“Our team is dedicated to rebooking all affected customers. We guarantee we will work to get you to your destination as soon as we can.”

What is happening with Flair?

The frustration with Flair comes amid what it called a “commercial dispute” with a U.S.-based lessor that saw four of its planes seized.

In an emailed statement to Global News Saturday, a spokesperson for Flair Airlines said four of its aircraft are “not operational” after “extreme and unusual” actions by a New York-based hedge fund and lessor.

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“The airline is aggrieved by this unprecedented action,” the statement read.

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The spokesperson added that the airline was involved in ongoing communications with the company and “payment has been initiated.”

“Flair Airlines will continue to engage in a consensual mediation with the lessor to remedy the situation,” it added.

According to a source with knowledge of the situation, the lessor in question is Airborne Capital.

The source, who isn’t authorized to speak publicly about the matter, told Global News that Flair wired money to Airborne on Saturday but was five days behind on payments worth roughly $1 million.

Airborne Capital declined to comment when contacted by Global News.

— with files from Amanda Connolly and Whitney Stinson.

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