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Originally Posted by fatscat
Is this really news?
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Yes, it is. One of its payment-processing vendors is now withholding $25M in remittances from the airline (reason unreported to date). That can have a catastrophic domino effect, because Flair has a Federal Court seizure and sale order obtained by the CRA in November hanging over its head. If they don't keep to their agreed tax payment schedule, CRA can execute on the order immediately (i.e., with no need for further court approval). If the CRA gets nervous about Flair's cash flow, they can start seizing the airline's real property (i.e., real estate, not airplanes) with next to no notice. This is to secure $67M of unremitted GST on 20 737s purchased by Flair over the past few years. These sorts of things, understandably, make other creditors very jittery too, and things can snowball
very quickly - it's a classic airline tale.
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Looks like this schedule was all set awhile ago but now being reported on? Not clear why.
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The schedule was revised to focus more on holiday destinations rather than domestic cities because there's more springtime demand (i.e., better cash flow) for those destinations. Corporate execs will be spinning this move madly as a common-sense airline industry move, which arguably it is ("go where the money is"), but there's real urgency to the need for greater revenue as Flair been frantically scrambling to stay afloat (er, aloft) for more than a year now. You may remember that this time last year, a lessor repo-ed four of its 737s.