Estimated reading time 12 minutes, 6 seconds.
Canadian ultra-low-cost carrier Flair Airlines announced on Dec. 15 that it intends to lease 14 Boeing 737 Max 8 aircraft, in addition to the 13 Max 8s that the airline ordered earlier this year. The rapid fleet expansion is all part of Flair’s plan to reach 50 aircraft by 2025.
The Edmonton-based carrier had announced the order for 13 Boeing 737 Max 8 planes back in January, nine of which have already joined Flair’s initial fleet of three 737-800s. The airline said it will end 2021 with 12 aircraft in service, and is expecting to add eight aircraft to the fleet in the first half of 2022 – four of which would be from the initial order for 13 Max 8s. This means Flair will have 20 aircraft in service by the summer of 2022.
Deliveries of the 14 new Max 8s are expected to be completed by 2023, which will quickly bring Flair’s fleet to 30 aircraft. Flair CEO Stephen Jones told reporters during a Dec. 14 press conference that the latest order of aircraft will likely come from a “mix of lessors,” including one of its significant financiers, 777 Partners.
While all of the aircraft that Flair has ordered in the last year are 737 Max 8s, Jones told reporters that he expects a portion of the airline’s eventual 50 planes to be the newer Max 8200 version.
“I think the [Max] 8200 — what’s known as the Ryanair “gamechanger” variant — is a fabulous aircraft, and I would love to introduce that into our fleet,” said Jones. “I believe that by the time we get to 50 aircraft, a reasonable proportion of our fleet will be the 8200 variant.”
Ryanair’s Max 8200 has a passenger capacity of 197 seats, while Flair’s Max 8s have 189 seats. The Max boasts 14 percent less fuel consumption and greenhouse gas emissions than predecessor 737 models.
Creating Opportunities
With a growing fleet, Flair expects to announce more routes in the new year. The low-cost carrier currently operates service to 32 destinations within Canada and the U.S., with service to Mexico beginning in February 2022.
As well, Jones said Flair will be opening new bases around Canada in the near future, but has yet to finalize locations. Current base locations include YEG, YXX, YVR, YOW, YYZ, and YKF airports.
“The business model that we have is to base the aircraft in different places around the country,” explained Jones. “It’s likely that some of these [new] aircraft will go into our existing bases and strengthen the frequencies there. But there’s no doubt that with these aircraft we will be opening new bases around Canada.”
When can we expect that official announcement? Jones said the carrier will likely be ready to share more information “by early next year.”
In addition to new routes and Canadian bases, the news of Flair’s growing fleet also means hundreds of new jobs. In fact, Jones estimates the additional aircraft will result in roughly 1,000 new jobs. This is based on needing approximately 24 flight attendants and 12 pilots per aircraft, plus all of the non-flying team members like maintenance providers, bag handling suppliers, etc.
When asked about concerns with the labor shortage, Jones said Flair is currently seeing a strong supply of pilots.
“I think pilots are still returning to Canada from airlines overseas,” he said, “and there are still a lot of Canadian pilots here that have been laid off from other airlines. So, we’ve been very fortunate to get great experienced pilots.”
He added that Flair has not run into any issues with finding cabin crew, either.
“Where we do see tightness is in some of the service providers to us,” he said. “So, for example, some of the airport check-in or bag handling suppliers find it more difficult to attract staff. Some of the maintenance providers are also under pressure.”
Speed bumps?
Earlier this month, The Globe and Mail reported that the Canadian Transportation Agency (CTA) was investigating the situation around Flair’s ownership and financial arrangements with 777 Partners — a Miami-based private equity firm that owns 25 percent of Flair.
The carrier’s former vice president of finance, Jocelyn Harris, claimed in 2020 that 777 Partners was acting as the lead decision-maker at Flair. However, it is a violation of Canadian laws for a foreign investor to take charge of company decision-making — in addition to not being able to hold more than 25 percent of a Canadian airline’s shares.
When asked if there were concerns surrounding the situation with 777 Partners, Jones said that he’s “very comfortable that Flair Airlines is fully compliant” with the CTA’s rules.
“The reviews by the CTA are a very standard part of the Canadian aviation environment, and we’re no exception,” continued Jones. “We are a Canadian airline; we’re 58 percent owned by Canadians, and we employ hundreds of Canadians around the country. . . . So I’m very comfortable with where we stand in that regard.”
Other concerns have circulated around Flair’s growth plan, which has often been referred to as “ambitious.” Regarding the Covid-19 pandemic, Flair appears to be optimistic about future travel demand with its fleet expansion plans.
The airline saw a surge in demand this past summer, particularly in August, when things “felt a bit freer,” said Jones. Since the new aircraft on order are expected to enter service in mid- to late-summer of 2022, and into 2023, Jones said the idea is to be prepared for a return of demand.
“It’s our belief that by that time, the vaccination rates will be [higher] and the pandemic will be under much more control than it has been, and the demand is going to rocket,” he said. “It’s going to rocket in the price-sensitive leisure sector first, which is where Flair has carved out its market.”
What happens if the demand isn’t as strong as expected? Jones said the airline industry is “well-practiced at dealing with shocks, and we’ll manage ourselves accordingly.”
As travel demand is expected to heat up eventually, so is the competition in the Canadian ultra-low-cost segment — as more low-cost carriers enter the market. For example, Canada’s newest ultra-affordable airline, Lynx Air, was just announced in mid-November. The Calgary-based airline intends to eventually operate a fleet of 46 Boeing 737s, with the first three aircraft scheduled for delivery in early 2022.
Flair is remaining focused on its business plan, while recognizing that the Canadian market needs strong, ultra-low-cost competition. The airline touts itself as Canada’s only independent ultra-low-cost carrier, and Flair has the advantage of being the “first mover” in that space, according to chief commercial officer, Garth Lund.
“We already have the low-cost base . . . we already have the scale,” said Lund. “I think that’s really where Flair’s success will come from.”
Flair at YKF
If YKF is your local airport, the good news is that Flair’s expansion is expected to benefit travelers in the Kitchener-Waterloo area. Jones said YKF is one of the airline’s “strongest performers, and we will feed the good performers.”
While Jones hinted at growth for Flair at YKF, he reiterated that new routes and bases will not be announced until the new year.
In the last few months alone, service to Fort Lauderdale and Orlando-Sanford, Florida, began from YKF, and flights to Cancun are slated to begin in February 2022.
Earlier this year, Regional Council approved an $11 million project to double the size of YKF — which is expected to be completed in the spring of 2022. The region said in mid-October that since Flair began operating out of YKF in May 2021, “their service has added more than 100 jobs to the local economy.”
Lund said Flair is happy to be working with YKF on its terminal expansion, “so the infrastructure is ready for us to continue growing at the airport.
“I think it’s safe to say that Kitchener-Waterloo will definitely form a part of our growth going forward.”
Will you be flying from st.john newfoundland to hamilton airport anytime soon? and back as well?