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Flair Airlines owes $67M in unpaid taxes

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Flair wants to see its fleet reach 26 planes this year, four more than last summer.

Radio-Canada

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The Canada Revenue Agency (CRA) has obtained an order for the seizure and sale of the assets of the carrier Flair Airlines . Court documents show the airline is required to pay $67.2 million in unpaid taxes to the federal government.

The amount concerns import duties on the approximately 20 Boeing 737 Max aircraft that make up the low-cost carrier's fleet. The purchase of the devices was necessary to meet travel demand in a post-COVID world, said Flair CEO Stephen Jones.

Wanting to reassure travelers, he affirmed that the order obtained by the tax administration in November has no impact on the carrier's activities.

Flair Airlines has agreed to settle the debt.

We have agreed payment terms with the x27;CRA to pay these import duties and we are up to date with this plan, Mr. Jones said by email.

The CRA said it cannot comment on individual cases for privacy reasons, but seeks to reach agreements with a company based on its ability to pay before seizing the payments. income or take other steps to recover the money.

As a last resort, we may take other legal recovery measures, such as seizing property or assets, to protect the Crown's interests, said Agency spokesperson Nina Ioussoupova.

This referral order obtained in November is the last tile that falls on the air carrier.

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The company had to go to court several times occasions.

Last March, Flair had four of its planes seized in the middle of the night after the aircraft leasing manager, Airborne Capital, claimed the company routinely failed to pay rentals amounting to millions of dollars.

In response, the low-cost carrier filed a $50 million lawsuit against Airborne Capital and three other companies, arguing that the payment demands were without basis.

The airline claims to have carried 296,000 passengers in December and 4.5 million in 2023, a sharp increase from #x27;previous year.

However, the carrier faces increased competition from WestJet and its rivals Lynx Air and Porter Airlines, two growing companies that also offer low-cost flights.

In addition, Flair competes with other airlines including Sunwing Airlines (owned by WestJet) and Air Transat since the company began offering flights to the sun.

In addition, Flair must continue to make payments of more than US$7 million per months on its twenty Boeing 737 aircraft leases. Import taxes on these same planes are difficult to pay, Mr. Jones told the Canadian Press in August.

With information from the Canadian Press

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