‘Flair effect’: Canadians ‘held hostage’ by duopoly of Big Air for too long, Flair CEO says

It wasn’t a great start to the week for Flair Airlines, who had to respond to media reports around the company owing $67 million in unpaid taxes.

According to a Canadian Press report, court documents showed the ultra-low-cost carrier (ULCC) was at risk of having its property seized by the Canadian Revenue Agency (CRA).

Flair quickly put out a statement saying the 18 aircraft in question, which were needed to meet the post-pandemic travel demand, were at no risk of being taken away.

“We have been and are working closely with the CRA to regularly pay the duties owed and are current with that plan,” the statement said. “Like any business, we remit fees related to our activities and this situation does not impact our daily flight operations.”

We want to address today's media coverage and be clear that the Government is NOT seizing flair property & this situation does not impact our daily flight operations. We will continue to fly and look forward to serving you now and in the future • #flyflair #flyaffordable pic.twitter.com/dXgjDgyeq8

— flair airlines (@flairairlines) January 30, 2024

The situation with the CRA certainly hasn’t affected the confidence of Flair CEO Stephen Jones, who believes his airline will continue to disrupt the industry in Canada in a positive way.

“I think Canadians have been held hostage by the duopoly of Big Air for far too long (and) been paying too much for too long,” he told NowMedia.

“For nearly 20 years, you effectively had this duopoly of the two big guys; so we come in and instead of having to pay $800 to fly for two hours, you can do that for $49 or $100 if you get the right ticket at the right time.”

While he didn't specify who he was talking about, Air Canada and WestJet are the two largest airlines in the country.

Jones, who held a position with Wizz Air, an established and popular ULCC in Europe, before arriving at Flair, explains that he didn’t think previous ULCCs in Canada were executing the concept very well.

“It’s an easy concept to think of and to talk about, but it’s a really hard concept to actually do,” he said. “I think what a lot of others have done is kind of drift off and they chase revenue at the expensive cost. For me, it’s all about the purity of sticking to the well-proven ULCC model.”

According to Jones, that ULCC model is based on two main principles – efficiency and choice.

Efficiency relates more to the airline and describes how Flair’s business model is centred around no major extra costs, which allows the company to offer people lower fares.

Choice relates to the customer's ability to get and pay for the product they want, whether it's the cheapest possible bare-bones fare or the chance to pay for extra things like additional luggage, seat choice or priority boarding.

Simply put, Jones says, Flair's low overall costs allow the airline to offer low fares, but that’s just one of the ways the CEO feels they’re disrupting the industry.

Another is the desire Flair has to fill routes that others don’t as major airlines slowly pull out of some regions and withdraw service that people rely on.

Jones also touts the airline as a greener option than others, as their newer jets burn less fuel and make much more efficient use of their space because it’s an all-economy configuration.

That means instead of offering business class, something Jones notes that most Canadians can’t afford, Flair gets the maximum number of economy seats on a plane.

“No, we’ll never do that,” Jones said when asked about the potential for Flair to add business or first class seats in the future. “Our whole thing is to keep it simple. Everyone’s in first class on Flair.”

And according to Jones, Flair’s presence in the market has already brought down the cost of tickets on other airlines.

It’s something he calls "the Flair effect."

Not only does the airline offer cheaper rates, but Jones explains those prices force other airlines to adjust their rates and it pulls costs down across the board.

“We’ve estimated that, in 2023, we saved Canadians $350 million,” he said.

Jones also thinks the Flair model will train Canadians to move to a much more spontaneous way of travelling after being trained for decades to consider flights as an expensive and meticulously-planned mode of travel.

At this time, Flair serves 25 airports in Canada, 11 in the United States, four in Mexico and is just expanding into the Caribbean.

The airline has 20 planes, with 18 of them being the Boeing 737 MAX 8 and the other two being Boeing 737NG.