Flair not fazed as backer cuts stake

CEO says it's business as usual as 777 Partners drops stake to less than 10%

- JOSH RUBIN

Flair Airlines announced Wednesday that Miami-based 777 Partners would be transferring part of its stake in the airline to an "affiliate" of one of Flair's lenders.

One of Flair Airlines' biggest backers is reducing its stake in the discount carrier, just a day after an Australian airline it owned was forced into insolvency when all its planes were seized by a lender.

Late Wednesday, Flair announced that Miami-based 777 Partners would be transferring part of its stake in the airline to an "affiliate" of one of Flair's lenders.

Sources say 777's ownership stake dropped from just under 25 per cent to less than 10 per cent.

As part of the transaction, the lender's affiliate also restructured Flair's debt.

The Flair change came a day after 777-backed Australian discount carrier Bonza Airlines was forced into insolvency proceedings following the seizure of its entire fleet of planes.

Industry sources say the unidentified Flair lender is affiliated with AIP Capital, a finance company which had Bonza's planes seized this week.

A report in Australia said U.S. insurance conglomerate A-CAP and its affiliates including AIP-currently hold roughly $500 million of Flair debt.