Flair Airlines accuses financial services firm of withholding $25 million

The tail section of a Flair Airlines plane is seen in this undated handout photo. THE CANADIAN PRESS/Handout: Flair Airlines

Flair Airlines is accusing a financial services firm of withholding about $25 million in funds from the company.

The budget airline says in a press release that Peoples Trust has "played a crucial role in facilitating the regular transfer of funds to Flair Airlines" for over a year.

But it says that in February, the financial services firm ceased regular transfers to Flair.

Flair CEO Stephen Jones says in the release that the airline has tried to resolve the issue amicably, but it plans to pursue a resolution through legal channels.

He says Flair has already implemented an existing alternative payment processing system to avoid disruptions to travellers.

Peoples Group, which Peoples Trust is a part of, says it "always maintains robust standards around the management of funds."

"We set and manage card transaction reserves following standard industry practices to protect consumers who have pre-paid merchants — like airlines — for services they have not yet received," it said in an emailed statement.

This report by The Canadian Press was first published March 13, 2024.