Flair Airlines (F8, Kelowna) said its operations returned to normal thanks to spare capacity after four of its aircraft were seized at the weekend in what chief executive Stephen Jones claimed was collusion between a US hedge fund lessor and one of Canada's two major airlines in an effort to undermine the ultra-low-cost airline.

"There are airlines that don't want Flair to exist. But Flair will fly. And we will thrive," he commented in a statement but failed to identify the airline or provide evidence of his allegations. Quizzed on this during an online news conference later, he said: "I think more will unfold on this as the days roll forward, and I am not going to name names or cite evidence here but suffice to say that we're very clear about what's been going on."

"We have come in and upset the cosy duopoly, and as a consequence, people want us out of business," he said in an earlier news conference. "We believe there were negotiations going on behind the scenes between one of the majors and the lessor to hurt Flair by offering above-market rates for the aircraft we have been leasing."

A spokesman for the airline said payments were made to Airborne Capital and four additional planes were brought into service after the lessor on March 11 seized four of its B737-8s - two at Toronto Pearson, one at Edmonton International, and one in Kitchener. ADS B-data showed the aircraft involved were C-FLKA (msn 64943), C-FLKC (msn 61807), C-FLKD (msn 61806), and C-FLKI (msn 64944). Flair operates a fleet of 22 aircraft, including nineteen B737-8s and three B737-800, ch-aviation fleets data shows. It leases two additional B737-8s from Airborne Capital, which were not seized.

Jones admitted Flair was a few days behind on a USD1 million lease payment to Airborne Capital but said he was shocked when the hedge fund took the unusual step of seizing the four aircraft. Asked if he'd ever heard of a similar situation, he said: "No, I haven't and speaking to the other lessors, they've never seen it in these circumstances either. Sure, if someone is 90 days late and there have been repeated denials on requests for payment, fine, but we were in constant communication with Airborne. This, from our perspective, came out of the blue." Asked if Flair would take legal action against Airborne, Jones was non-committal: "I think we'll just have to see how things unfold".

In an earlier statement, Flair said it was "aggrieved" by the lessor's "unprecedented action". "Flair Airlines has been involved in ongoing communications with the lessor, and payment has been initiated, as previously done. Flair Airlines will continue to engage in a consensual mediation with the lessor to remedy the situation," it stated.

Airborne Capital has not responded to repeated requests for comment from ch-aviation.

Other lessors "supportive"

Asked how the current situation might affect Flair's relationship with other lessors, Jones said: "Naturally, the circumstances over the last few days have triggered a bunch of conversations with our existing lessors, and I would say that every one of them has been incredibly supportive. They all see this as very unusual steps that have been taken by Airborne."

Referring to payments on leases across the rest of its fleet, Jones said these were "100% up to date" and that other lessors were "all very supportive of the airline". We have conversations in play with lessors for additional aircraft, and those conversations are continuing on track. I think people see the situation for what it is."

Responding to a question on how the merger between WestJet and Sunwing Airlines would affect Flair's operations, Jones said: "It reduces competition in the domestic market. As a consequence, it increases the power of the major airlines, which increases their capability to squash incumbents". He added: "It does compress competition and concentrates control of slots at Toronto Pearson but other than that we are playing our own game."

"Flair Airlines is committed to service for its passengers and is proud to have returned to normal operations across its network," the airline said in a statement. "Travellers can be assured Flair Airlines will continue to fly its schedule and book new travel with confidence. There were no cancellations yesterday, and the airline has brought four additional planes into service today. We do not anticipate any further disruptions to our route map."

The carrier said about 1,900 passengers were impacted when the aircraft were grounded. Of these, a quarter had rebooked with Flair within three days and been offered accommodation and meal vouchers. The airline said it had appointed a team to assist those passengers who could not rebook immediately.