Flair Airlines has announced its plans to expand its inaugural fleet to 50 planes within the next five years, putting it directly into competition with Air Canada and WestJet.
But that objective isn’t sitting well with everyone - including some of the ULCC’s own shareholders. It has come to light that Prescott Strategic Investments LP, the owner of nearly 68 per cent of Flair’s shares, filed a petition in BC Supreme Court in JUN, claiming that Flair hadn’t sought shareholder approval as required for the leases or expansion plans.
Representatives of Prescott say other airlines slowed or cancelled their fleet expansion plans during the pandemic slowdown - and they believe Flair should have, too.
In January, 2021, Flair signed leases on 13 new Boeing 737-8s through a deal with 777 Partners, a Miami-based investment firm that owns a quarter of Flair’s shares. The company received the first of these planes in May, as Open Jaw previously reported. The company has also planned to purchase an additional 24 MAX 8 planes from Boeing, with the option of purchasing another 60 later.
“Because Flair had already begun selling tickets connected to the expanded services, Flair’s position was entrenched and any after-the-fact vote by shareholders would be futile,” the petition reads.
The petition also states that Flair did not get approval from the Canadian Transport Agency for the leases, which could put the aviation firm’s ability to operate in Canada into question.
Prescott is demanding that Flair buy back its shares at $0.85 a share.
Neither Flair nor 777 Partners has filed a response at this time.
