Canada Jetlines grounds all flights, plans to file for creditor ...
Business
Canada Jetlines is grounding all flights and says it is temporarily ceasing airline operations, effective immediately.
Jenna Benchetrit · CBC News
· Posted: Aug 15, 2024 12:09 PM EDT | Last Updated: 1 hour ago
Canada Jetlines is grounding all flights and says it is temporarily ceasing airline operations, effective immediately, making it the latest carrier to signal distress within Canada's troubled commercial airline industry.
The airline says it has been unable to find the financing needed to keep flying and plans to file for creditor protection.
Passengers with existing bookings should contact their credit card company to secure refunds, according to the company.
The shutdown follows the resignation of four executives on Monday, including CEO Brigitte Goersch.
It marks yet another airline departure from Canadian skies after the closure of Lynx Air and budget carrier Swoop within the past year.
Canada Jetlines, which is headquartered in Mississauga, Ont., serves Canadians flying within the country or to sun destinations in the U.S., Caribbean and Mexico. It launched its first flight in September 2022.
The carrier provides charter flights to sports teams and companies and leases its fleet to other carriers in the summertime. Its former CEO Eddy Doyle characterized it as leisure airline, though it was originally conceived as an ultra low-cost carrier.
That business model was ultimately shelved, partly because the starting price for discount carriers in Canada "is composed of a lot of taxes," and partly due to the challenges of competing with Air Canada and WestJet, Doyle told CBC News in February.
WATCH | Why air travel is so expensive in Canada:
At the time, Doyle said he thought there was "enough supply there to meet demand for the Canadian travelling public," with Air Canada, WestJet and Air Transat back at full-strength following the disruptions prompted by the COVID-19 pandemic.
But he added that any new entrants would be fighting for the same portion of the market.
Doyle announced his retirement in June. Goersch then took over as chief executive.
'It's a sign of the times'Aviation expert John Gradek told CBC News that the airline had "been on the edge for months."
"When you look at their pattern of operations and their pattern of funding ... to me it was a surprise that they didn't get their licence pulled by Transport Canada earlier," said Gradek.
"These guys had six airplanes and a couple hundred people, and they were just going month-to-month, trying to scramble and get as much cash as they possibly could to meet the payroll and the lease cost on the airplane[s]," Gradek said.
He said it was only a matter of hours after the executive exodus on Monday that the airline would collapse.
"It's a sign of the times. We have a problem in terms of commercial aviation in Canada," Gradek added.
"People were spending five, six, $700 to buy a ticket on an airline that, in my opinion, was on pretty shaky ground. That, to me, is a failing of our transportation policy [and] practices."
Trading of company shares on the NEO Exchange was halted late yesterday afternoon.
Jenna Benchetrit is the senior business writer for CBC News. She writes stories about Canadian economic and consumer issues, and has also recently covered U.S. politics. A Montrealer based in Toronto, Jenna holds a master's degree in journalism from Toronto Metropolitan University. You can reach her at [email protected].
With files from CBC's Reid Southwick and Nisha Patel, and The Canadian Press
