Flair Airlines Captain Ken Symonds inspects the outside of one of the company's Boeing 737 MAX 8 aircraft while parked at a gate at Vancouver International Airport, in Richmond, B.C., on April 17.DARRYL DYCK/The Canadian Press
Flair Airlines says its major U.S. investor, 777 Partners, has reduced its stake in the Edmonton-based discount carrier.
In response to a query from The Globe and Mail, Flair said a company related to its largest lender has acquired a portion of 777 Partners’ shares and will provide new debt funding. Flair did not provide details, including which company acquired the shares and the terms.
“We are excited about this strategic evolution and the new financial commitment,” said Stephen Jones, Flair’s chief executive officer, in a statement. “We are grateful for their support as we chart the course for continued growth.”
Miami-based 777 Partners now owns less than 10 per cent of Flair, down from 25 per cent, the maximum allowed by a foreign entity. The investor was also a major provider of financing and leased aircraft.
Flair made the announcement two days after 777 Partners’ Australian airline, Bonza, ceased operations and entered administration, a form of court protection from creditors for insolvent companies. The Australian Financial Review reported creditor AIP Capital seized Bonza’s aircraft, citing an internal e-mail from Bonza chief executive officer Tim Jordan.
Bonza said in a statement the shutdown is temporary. “We apologize to our customers who are impacted by this and we’re working as quickly as possible to determine a way forward that ensures there is ongoing competition in the Australian domestic aviation market.”
In 2018, 777 Partners became a Flair shareholder, spurring a major expansion that was to include the addition of about 50 Boeing 737s leased from the U.S. investor. In 2022, 777 Partners’ involvement with Flair spurred a Canada regulatory investigation into the possibility the U.S. company was calling the shots. Foreign investors are not allowed to control Canadian airlines through board seats or strategic decision-making. After a review by the Canadian Transportation Agency, Flair agreed to add more Canadians to its board and remove 777 Partners’ veto rights over its decisions on aircraft leases.
Meanwhile, 777 Partners’ insurance division, 777 Re Ltd., recently had its credit rating downgraded by AM Best of New York. The credit rater cited 777 Re’s “weak” balance sheet and exposure to illiquid investments in affiliated investments. In addition to Flair and Bonza, 777 partners is a major owner of pro soccer teams. It did not respond to e-mailed questions about Flair.