Flair Airlines (F8, Kelowna) was saved from going out of business within “approximately 10 days” by a Canadian Federal Court ruling on October 10, Kelowna iNFOnews has reported citing court documents.

The western Canadian LCC had contracted KF Cargo (FK, Kelowna), a KF Aerospace (formerly Kelowna Flightcraft) subsidiary, in 2015 to provide dispatch services. However, on June 24, KF gave three-months notice, which the contract required, to end its business with Flair due to an outstanding debt of CAD204,750 dollars (USD155,750). It demanded payment within five days.

For unexplained reasons, Flair did not receive the letter until July 9. It then submitted the letter to its accounts department, which subsequently paid the debt, but the letter did not come to the attention of senior executives at Flair until as late as August 13.

On October 9, the termination date of the contract, Flair urgently asked the court for a temporary injunction to extend the contract. This was granted, despite KF Aerospace claiming this would prevent it from seeking out new customers and force it to remain “stuck at least for another 90 days” providing services for a company that owed it approximately CAD4 million (USD3 million) in aircraft leases. Flair disputed the claim.

KF Aerospace said it would send another three-month termination notice effective from the date of the court’s decision. Flair said it possessed the CAD150,000 (USD114,000) necessary to see out the contract.

Federal Court Justice Elizabeth Walker ruled that without the injunction, Flair would not have been able to meet commitments to 120,000 customers who had bought tickets for flights and would also have to lay off 200 to 300 employees.

“Flair Airlines will likely be put out of business within a short period of time (it estimates in approximately ten days),” she explained at the time of the ruling.

In addition, the judge related that communications from KF Aerospace suggested that it had intended to continue providing services to Flair under the contract into 2020, despite its original notice letter.

ch-aviation reached out to both parties for comment. Jim Scott, president and chief executive of Flair Airlines, responded: “We were very confident that the judge would grant the order in our case. She agreed that withdrawing dispatch service on short notice would have a bad outcome for the airline. In fact, the judge provided Flair Airlines with costs, as this action was so egregious.”