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, which flew mainly to sun destinations out of Toronto, said Thursday it has been unable to find the capital needed to stay afloat and plans to file for creditor protection.
“The company … pursued all available financing alternatives including strategic transactions and equity and debt financings,” said spokeswoman Erica Dymond in a release.
“Unfortunately despite these efforts, the company has been unable to obtain the financing required to continue operations at this time.”
Passengers with existing bookings should contact their credit card company to secure refunds, the company said. “Every effort is being made to assist passengers at this time.”
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 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.
Calgary-based, low-cost airline Lynx Air has ceased operations, citing rising costs among reasons for the closure. McKenzie McMillan, a travel consultant with The Travel Group, tells BC Today host Michelle Eliot that Canadian airlines struggle more than their U.S. counterparts because fewer people travel longer distances between urban areas.
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.
Canada Jetlines, which has struggled to get more than a handful of planes off the ground since its inaugural flight in September 2022, faced a series of hiccups even before this week’s turbulence.
Even its initial launch, announced for December 2019, was postponed when company announced that fall it was laying off most employees after failing to secure the required financing…
Read More: Canada Jetlines grounds all flights, plans to file for creditor protection