NewLeaf Travel is partnering with Kelowna-based Flair Airline to provide low cost flights out of YLW.
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October 23, 2019 - 2:31 PM
Flair Air was saved from potential failure earlier this month when the court mandated Kelowna Flightcraft keep up a contract that it tried unsuccessfully to exit from, just a little longer.
Flightcraft had contracted dispatch services to Flair Airlines since 2015 and among the many details in its business agreement, ending the contract would require three months notice.
Flightcraft executives, in court documents released today, Oct. 23, said they tried to serve notice that they wanted to end the relationship June 24 because of an outstanding debt of $204,750, but Flair executives didn’t receive the document, which had moved through the billing channels.
So on Oct. 9, the day the contract was set to expire, Flair Air rushed the matter to court for an interim injunction prohibiting Flightcraft from terminating its contract. The court sided with Flair—giving them time to find replace the FlightCraft contract —despite the assertion from Flightcraft that doing so would set them back 90 days from finding new clients in favour of servicing “a company that owes it” $4 million in airline leases. Flair airlines disputed that figure.
Flightcraft has indicated that it will once again inform Flair Air of its intent to end the contract, effective the date of the court decision. The $50,000 a month it will be owed for those services has already been set aside.
Among other issues facing the judge dealing with the matter, was the damage Flair Air would suffer if the contract was cut short immediately.
“If the injunction is not granted, the services provided by Kelowna Flightcraft under the contract will terminate immediately, Flair Airlines will not be able to carry on business until it obtains a new dispatch contract from a new provider," according to the decision.
Without Flightcraft, Flair Airlines would not have been able to meet its present commitments to approximately 120,000 customers who have purchased tickets for flights, including some 15,000 customers who have pre-purchased tickets for travel within the next week, and approximately 200 to 300 people employed by Flair Airlines would have had to be laid off because the company would not have beenable to meet its payroll.
“Flair Airlines will likely (be) put out of business within a short period of time (it estimates in approximately ten days),” reads the court decision.
The future of Flair was less the issue than the fact that the court found that the decision to terminate the contract was not well communicated.
“The communications from Kelowna Flightcraft certainly suggest its intention to carry on providing services to Flair Airlines under the Contract well into 2020 in spite of the Notice Letter,” reads the decision.
"Moreover, it is arguable that Flair Airlines need not show a change in position if it reasonably relied on Kelowna Flightcraft's representations and conduct to assume the status quo would not be effective and in that sense, it could argue that it acted to its detriment.”
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