Region of Waterloo International Airport - YKF

[SammyOES]

I was hoping to read the decision but it seems like it’s still private?

The board seats seems bad and so does the arrangement where the foreign owner also provides the planes.

I suppose you can argue that a minority foreign owner being the same entity that the planes are leased from gives that entity an outsized amount of control. But otherwise, my understanding is that leasing planes from (potentially) foreign companies is just the way modern airlines work.

Yeah, it’s the non-arms length relationship that’s the potential problem to me not the leasing in and of itself.

[SammyOES]

Aside from knowing what the problem is, I’m interested in knowing why it’s a problem *now* and wasn’t before things got off the ground.

That’s part of the reason I feel like it has to be more than just the board seats. That’s a simple and clear situation that should have been obvious to everyone (including regulators) from the start.

But who knows how these processes work.

[danbrotherston]

The US company holds a majority of the board seats. That's not very good for demonstrating that it's Canadian-controlled.

Whew, glad we avoided having cheap flights! It was a close call, but local consumers are safe now.

I like that we can have nuanced discussions here. For example, we can talk about how there are issues broader than just "lower price for consumers = good".

I'm not always in agreement with some of these issues, and I am not really sure that the Canadian ownership rules for airlines makes sense (frankly, I don't even really understand them), but certainly there's a discussion to be had there.

I mean, you wouldn't say the same thing if we scrapped environmental or consumer safety rules that also raise prices for consumers no?

[danbrotherston]

Aside from knowing what the problem is, I’m interested in knowing why it’s a problem *now* and wasn’t before things got off the ground.

That’s part of the reason I feel like it has to be more than just the board seats.  That’s a simple and clear situation that should have been obvious to everyone (including regulators) from the start.

But who knows how these processes work.

I mean, regulators often move slowly, and I'm not sure the situation was clear before...isn't this part of their expansion plans which are only now being realized?

[Rainrider22]

Or perhaps it is the competition like Air Canada who has strong governmental ties that is pushing the issue. Fair is have great results and cutting into the competition. The funny thing is though, Air Canada cares not at all about servicing our area other than through Pearson.

[danbrotherston]

Or perhaps it is the competition like Air Canada who has strong governmental ties that is pushing the issue.  Fair is have great results and cutting into the competition.  The funny thing is though, Air Canada cares not at all about servicing our area other than through Pearson.

Neither Flair nor Air Canada care about serving our area, they care about exploiting a market, and Air Canada has found a niche that doesn't involve using our airport and Flair's niche does use our airport.

It's not true that AC has "government ties", but they have power over legislators. So maybe they push for rules like these because they benefit.

But it's also possible that they merely follow the rules and it is unfair to have to compete with someone who isn't following those rules.

And all that is entirely beside the point of whether the rules make sense or not.

[tomh009]

Whew, glad we avoided having cheap flights! It was a close call, but local consumers are safe now.

Flew to Cancun on Flair (from YKF) last month. About $325 all in (one way), roughly $100 less than Air Transat (which is YYZ). I'll note that the Air Transat planes are newer and more comfortable (and larger, though that's neither better or worse), the in-flight service is better and the customer service responds more quickly.

For a $100 difference, if it were the same airport, I would definitely choose Air Transat. But then they don't fly out of YKF, so it's not really an apples-to-apples comparison.

[tomh009]

It's not true that AC has "government ties", but they have power over legislators. So maybe they push for rules like these because they benefit.

But it's also possible that they merely follow the rules and it is unfair to have to compete with someone who isn't following those rules.

Almost every country restricts operation of foreign-controlled airlines on domestic routes.

[Rainrider22]

It's not true that AC has "government ties", but they have power over legislators. So maybe they push for rules like these because they benefit.

But it's also possible that they merely follow the rules and it is unfair to have to compete with someone who isn't following those rules.

Almost every country restricts operation of foreign-controlled airlines on domestic routes.

Dan,  do you even know who is on the board of directors for Ac.   Have a look and tell me again they have no governmental influence.

[SammyOES]

I mean, regulators often move slowly, and I'm not sure the situation was clear before...isn't this part of their expansion plans which are only now being realized?

I didn’t know the actual history of Flair. They’ve been around for longer than I thought. 777 partners invested in 2018 or 2019 (or both - Wikipedia says 2018, found a press release for early 2019). But looks like the jets leased from them happened last year.

I was under the impression that Flair was brand new and so assumed regulators would have been looking at them before they started flying.

[SammyOES]

Some interesting information here. Particularly the very last sentence.

“
Prescott owns just under 68% of the airline’s voting shares, and had taken over the company’s management in 2018.

“Shortly after taking over management of Flair, Prescott’s partners became aware that Flair required an immediate infusion of funds in order to pay down a line of credit,” the petition states, a situation which saw 777 Partners sign on as an investor after being approached by Flair. The airline currently owes 777 Partners $140 million, most of which is at an 18% interest rate.

…

Moreover, the company didn’t get approval for the leases from the Canadian Transportation Agency, raising “significant concern” about whether the leases would put the company under control of 777 Partners, which could lead to a finding that it wasn’t “controlled in fact” by Canadians as required by the Canada Transportation Act. Such a finding could strip the aviation firm of its licence to operate in Canada, Prescott claims.

Meanwhile, directors of 777 Partners have allegedly threatened to call in Flair’s debt and put it into receivership if it doesn’t proceed with the leases and expansion plans, which Prescott claims are not in Flair’s best interest.

“

https://biv.com/article/2021/07/lawsuit-...n-plan?amp

[tomh009]

Almost every country restricts operation of foreign-controlled airlines on domestic routes.

Dan, do you even know who is on the board of directors for Ac.   Have a look and tell me again they have no governmental influence.

Gary Doer is on the AC board (one of 12 directors), so, sure, one could argue that the government has some influence on AC. But there is no evidence that AC has any real influence on the federal government's policies.

[Chris]

They opened the new terminal today.

New domestic arrivals terminal now open at regional airport
https://kitchener.citynews.ca/local-news...rt-5287228

[Chris]

Bold strategy Cotton, let's see if it pays off for him. We have a swanky new terminal, don't mess this up Mr. Jones.

Flair CEO argues airline deserves exemption from Canadian ownership rules
https://kitchener.citynews.ca/local-news...es-5286690

[ac3r]

Let's hope it does okay. Flair is at risk of having its license pulled because it appears it's not actually a Canadian airline. And, Pivot Airlines is now embroiled in a scandal after being caught by the National Drug Control Directorate of the Dominican Republic after attempting to smuggle 210 kilograms of cocaine into Canada. Certainly not good press to have after announcing a multimillion dollar airport expansion that largely happened due to both of these airlines, both of who are now going to be caught up in very expensive legal troubles for many years.