Canada's struggling Flair Airlines in talks to restructure balance sheet
Canada’s Flair Airlines Ltd. is in talks to raise funds that would help ease the debt burden at the budget carrier beset by aircraft repossessions, back taxes and a financial backer accused of fraud.
Interim chief executive Maciej Wilk is in discussions with “financial institutions that are not shy of taking a slightly higher-risk investment” to participate in an ongoing recapitalization of the low-cost carrier, he said in a phone interview. New lenders or equity funding would help the airline address its significant debt load, 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 said by phone. “Just to be clear, it’s not like this is something that we desperately need right now.”
Flair ran into financial trouble after higher costs upset its efforts to rapidly scale up as the pandemic eased. Lessors repossessed four Boeing Co. 737 aircraft in March 2023 — stranding passengers headed for spring break — and its former lead investor, 777 Partners LLC, has faced accusations of fraud in court. Another 777-backed carrier, Australia’s Bonza, entered liquidation last month.
Flair still owes the Canadian government tens of millions in back taxes, the Canadian Press reported in January, 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 ongoing.
777 is still a lender to Flair, Wilk said, but its stake has fallen to less than 10 per cent from about 25 per cent, and it no longer has board seats. Advantage Capital Holdings LLC, a New
Read more on financialpost.com
