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Wednesday,  April 17, 2024 5:46 PM 

Flair accuses financial services firm of withholding $25M

  • Air
  •   03-14-2024  6:13 am
  •   Pax Global Media

Flair accuses financial services firm of withholding $25M
Pax Global Media

Flair Airlines is accusing a financial services firm of withholding $25 million in funds.

In a press release, the Edmonton-based ultra-low-cost carrier said the Peoples Trust, a Canadian financial services company based in Vancouver, “played a crucial role in facilitating the regular transfer of funds to Flair Airlines'' for over a year.

But apparently, in February, the firm stopped sending regular transfers to the airline, the Canadian Press reports.

Flair CEO Stephen Jones says the airline has tried to resolve the issue amicably, but it plans to pursue a resolution through legal channels.

He says Flair has implemented an existing alternative payment processing system to avoid disruptions to travellers.

In an email sent to the Canadian Press, Peoples Group, which Peoples Trust belongs to, said it maintains robust standards around the management of funds.''

“We set and manage card transaction reserves following standard industry practices to protect consumers who have pre-paid merchants like airlines for services they have not yet received,'' it said in a statement to CP.

The revelation comes as Flair deals with other stressors. Recently, it was revealed that the carrier owes the Government of Canada $67 million in unpaid taxes.

Arrangements to pay the amount have been made, said Jones previously, saying the situation has no impact on Flair’s operations.

Flair’s growth will also slow this year due to delays at Boeing, which is answering to U.S. regulators after a mid-flight blowout of a side panel on board an Alaska Airlines flight earlier this month that grounded 737 MAX 9 planes for weeks.

As of last fall, Flair’s plan was to boost its fleet to 26 Boeing 737 MAX jetliners in 2024, up from 20.

Flair now has one less competitor in the low-cost carrier market following the demise of Lynx Air last month.

Recently, Jones expressed interest in adding some of Lynx’s now-available planes to Flair’s fleet to help bolster the airline’s growth plans.

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