Flair in talks with financiers, seeks $100M as it addresses debt load

Flair Airlines' debt load is making headlines as the low-cost carrier attempts to raise funds to help pay down expenses incurred by aircraft repossessions, back taxes and a financial backer accused of fraud.

According to BNN Bloomberg, Flair’s Interim CEO Maciej Wilk is in talks with “financial institutions that are not shy of taking a slightly higher-risk investment” to participate in a recapitalization of the Edmonton-based airline.

New lenders or equity funding will help Flair address its debt load, Wilk told the outlet in an interview, which he wouldn’t quantify.

“In order really to give us breathing space and comfort to continue a restructuring of the company, I think we would be very happy if we received like a hundred million” Canadian dollars, Wilk told the news outlet. “Just to be clear, it’s not like this is something that we desperately need right now.”

Flair ran up a bill when it rapidly tried to grow its fleet as the pandemic cooled. As previously reported, lessors repossessed four Boeing 737 aircraft in March 2023 — stranding passengers during the spring break rush — and its former lead investor, 777 Partners LLC, has faced fraud accusations. Another 777-backed carrier, Australia’s Bonza, entered liquidation last month.

Meanwhile, Flair owes the Canadian government tens of millions in back taxes, prompting them to arrange a payment plan with the Canada Revenue Agency.

A court dispute over the planes, which Flair alleges were “unlawfully” seized by Airborne Capital Ltd., is still ongoing.

Advantage Capital Holdings LLC, a NYC-based insurance company, has provided some support amid the airline’s economic woes, Wilk said.

The “last man standing”

Airline competition in Canada has eased up in recent months with the closure of WestJet’s budget carrier Swoop, Lynx and, most recently, Canada Jetlines.

Securing a new round of financing would help Flair maintain its position as the “last man standing,” Wilk said

The CEO noted that Flair was profitable in July, will be again during August, and wants to grow its fleet to at least 24 jets after next summer, up from 20 today.

To stimulate sales, Flair, this week, launched $1 base fares on select northbound routes from Mexico, the U.S., Jamaica, and the Dominican Republic to Canada.

The offer “is only the beginning,” said the carrier in a press release Monday (Aug. 26).

The airline says it will continue to introduce $1 base fares on different routes across its network throughout the year.

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