Flair Airlines CEO accuses rival of working with U.S. company that seized its leased aircraft

After a weekend of cancelled flights, the CEO of Flair Airlines came out swinging Monday, accusing one of Canada’s two major airlines of working with a U.S. hedge fund that seized four Flair jets over the weekend.

Stephen Jones admitted Flair was several days behind on a $1 million lease payment to Airborne Capital, but said he was shocked when the hedge fund took the unusual step of seizing four Flair aircraft on Saturday. With those planes suddenly unavailable, 1,900 passengers had their flights cancelled with no notice, at the start of spring break.

Jones says he suspects Airborne Capital was working with one of Canada’s major air carriers to undermine Flair.

“We have come in and upset the cozy duopoly, and as a consequence people want us out of business,” said Jones. “We do believe there were negotiations going on behind the scenes between one of the majors and the lessor to, you know, hurt Flair by offering above-market rates for the aircraft we have been leasing.”

Jones didn’t provide evidence of the alleged collusion, or name the airline he suspects of working with Airborne Capital to lease Flair’s planes at a higher rate.

A spokesperson for the lessor denied the CEO's theory in a written statement on Tuesday.

"Airborne Capital strongly rejects the allegations that have been made by Flair Airlines in recent days in relation to four Airborne-managed aircraft," the spokesperson said.

"The leasing of the four Airborne-managed aircraft was terminated following a five-month long period, during which Flair was regularly in default of its leases by failing to meet its payments when due, with payment arrears reaching millions of dollars."

The company also wrote that it has a "legal obligation to seek to mitigate losses."

In a separate statement to CTV News, Air Canada said it “has not spoken to any of the lessors nor have they come to Air Canada offering their aircraft.” WestJet did not respond to a request for comment.

Jones insists there is more to the story than Flair not paying its bills on time. “There are airlines out there that don’t want Flair to exist, and it doesn’t surprise me. We are a challenger to the status quo,” he said.

As for the weekend flight cancellations, Jones said 420 of the 1,900 impacted passengers were able to re-book within 72 hours. The remainder have be offered flights at a later date, or a full refund.

“We have special call lines going on, we have set up a dedicated team to manage this,” said Jones. “I know I have seen some go to the media where passengers felt they didn’t know what was going on, and weren’t getting proper communication. We are doubling down on that, trying to make sure people know what’s going on.”

Flair has brought in three backup aircraft and was able to return to its full schedule by Sunday. But plans for summer expansion may be reduced if it can’t negotiate with Airborne Capital for access to the four seized jets.

“The behaviours to date, I would say that is a tough road to see them back down. This hedge fund behaviour makes negotiations tough,” said Jones.

While the sudden cancellations may have hurt the brand, Jones says passengers are safe booking with Flair. “People can continue to feel confident with their existing travel plans, and can book new travel with confidence.”