Canada Jetlines halts operations, plans for creditor protection
Author of the article:
CP, The Canadian Press
Christopher Reynolds
Published Aug 15, 2024 • Last updated 8 hours ago • 2 minute read
Canada Jetlines has grounded all flights, temporarily ceasing operations amid a financial crisis at the carrier, a development one of its former board members from Calgary called surprising.
The airline said Thursday it has been unable to find the capital needed to keep flying and plans to file for creditor protection.
“The company . . . pursued all available financing alternatives, including strategic transactions and equity and debt financings. Unfortunately, despite these efforts, the company has been unable to obtain the financing required to continue operations at this time,” spokeswoman Erica Dymond said in a news release.
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Ravinder Minhas, who said he stepped down as an independent board member for the carrier in June, said he was surprised by the collapse but added the Canadian airline industry is a tough business environment.
The failure of other smaller carriers — Lynx Air and Swoop — over the past year might have contributed to Canada Jetlines’ demise, he said.
“When Lynx Air filed for bankruptcy, as a consumer do you go with an independent airline or am I going to stick with the Air Canadas of the world?” said Minhas.
“It’s a challenge for the industry and a challenge in Canada for someone with a similar size — does it have a snowball effect?”
Minhas, who’s been a fixture of the brewing and distilling industry and other sectors, said he didn’t drop his role with Canada Jetlines due to its woes.
“I sit on many boards and this was just one of them,” he said.
Passengers with existing bookings should contact their credit card company to secure refunds, the company said.
The shutdown follows the resignation of four board members on Monday, including chair and CEO Brigitte Goersch.
It marks yet another airline departure from Canadian skies within the past year as concerns about domestic competition persist.
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Until Thursday, the company was flying a few dozen flights per month from Toronto to Miami and Orlando, Fla., and Cancun, Mexico, according to aviation tracking firm Cirium.
Canada Jetlines, which has struggled to get more than a couple of planes off the ground since its inaugural flight in September 2022, faced a series of hiccups even before this week’s turbulence.
On June 30, Eddy Doyle stepped down as CEO after taking on the role in 2021.
Minhas said Canada Jetlines had been leasing some aircraft to carriers in Europe.
In January 2023, Canada Jetlines pressed pause on domestic routes as the carrier refocused on sun destinations and leasing its planes, but said at the time it aimed to resume in-country flights that fall.
In October 2019, the Mississauga, Ont.-based company announced it was postponing its planned December launch and laying off most employees after failing to secure the required financing and losing investment partners.
That setback came after seven years of fundraising and despite Ottawa lifting the foreign ownership ceiling on Canadian airlines to 49 per cent from 25 per cent in 2018, allowing for a wider pool of investors.
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