Canadian Tax Agency Secures Court Order Against Flair Airlines Over Unpaid Taxes

The Federal Court of Canada has recently granted a significant order in favor of the Canadian government, authorizing the seizure of Alberta-based properties owned by Flair Airlines. This decisive move comes in an effort to recover over 67 million Canadian dollars (approximately USD 49.8 million) in unsettled taxes. As reported by the Globe and Mail, the action was initiated by Canada’s Revenue Agency on November 23, 2023, targeting Flair Airlines (F8, Kelowna) for its substantial tax debt, which includes penalties, interest, and additional fees.

The court’s order provides the Alberta Sheriff’s Department with the authority to confiscate and sell both the real estate and personal assets of Flair Airlines Ltd. within its jurisdiction. This decision marks a significant escalation in the government’s efforts to enforce tax compliance.

Simultaneously, the Canadian Transportation Agency (CTA) has launched an investigation into Flair Airlines’ adherence to ownership and control regulations. This inquiry, first reported by ch-aviation, scrutinizes the influence of 777 Partners, a Miami-based minority shareholder, on Flair’s operations. 777 Partners, known for providing aircraft leases and financial support to Flair, is under review for potentially overstepping its minority position.

In response to these developments, a Flair Airlines spokesperson disclosed the airline’s arrangement with the taxation agency, involving an installment plan to settle the owed “importation duties.” According to the spokesperson, these payments are current, and the terms of the agreement remain confidential. Despite the looming court order, the spokesperson assured that Flair Airlines’ operations continue unimpeded.

Flair Airlines maintains an active fleet, including eighteen B737-8s and two B737-800s, serving 36 destinations across four countries: Canada, the United States, the Dominican Republic, and Mexico. While the Canadian Revenue Agency refrained from commenting on the specifics of the case, it emphasized its preference for repayment agreements over seizure actions, reserving the latter as a measure of last resort.