Leisure Carrier Canada Jetlines Ceases Operations

The Canadian marketplace continues to be a very tough environment for low-cost airlines: after the tax issues experienced by Flair Airlines in January and the demise of Lynx Air just a month later, another carrier is shutting down its operations. Canada Jetlines, a small airline based in Mississauga, Ontario and operating mainly from Toronto Pearson International Airport, announced on Thursday, August 15 it is grounding all its flights and ceasing operations.

The announcement comes just a few days after four top executives of the carrier announced their resignations, including the CEO Brigitte Goersch. “The Company has historically financed its future requirements through a combination of debt, equity or other facilities,” the company said in a statement on August 12. “As a result, the Company will need to raise additional capital to continue operations. The Company’s board of directors and management is actively working on potential sources of additional capital.”

According to a spokeswoman Erica Dymond, “The company has been unable to obtain the financing required to continue operations at this time”, therefore all operations are temporarily suspended with immediate effect.”

A Short History

Initially founded in 2013, the airline started operations only in 2022 operating a small fleet of four Airbus A320-200 aircraft in a high-density all-economy 174-seat configuration. Initially focusing on a handful of domestic routes within Canada served from its Toronto-Pearson base, the carrier decided to shift its focus on sun destinations at the beginning of 2023, providing low-frequency services to Guyana (Georgetown), Jamaica (Montego Bay), Mexico (Cancun), and the United States (Las Vegas, Miami, and Orlando).

John Gradek, a lecturer at McGill University’s Aviation Management Program, told the Financial Post that Jetlines had been on the “edge of insolvency” for nearly a year.

“You need cash in order to survive in Canada,” Gradek said, noting that Canada Jetlines had been chasing high-volume, competitive markets by branding itself as an upscale carrier, instead of focusing on generating steady income and profits. Gradek also believes there’s been a lack of oversight of carriers such as Canada Jetlines by Transport Canada: “The license to operate Canada Jetlines should have been looked at months ago, and in my opinion, should have been suspended, because Canadians need to have an airline that they could trust, that has a good governance model, that has financial stability,” Gradek said.

Such oversight is more present in other countries where smaller start-up carriers face tougher scrutiny on behalf of the regulators and are required to provide more evidence about the soundness of their business model and the source of their financing. For example, in the U.K., start-up carriers are required to have enough funds to keep operating for at least three months without any revenue in order to obtain the license to operate.

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Vanni Gibertini

Vanni fell in love with commercial aviation during his undergraduate studies in Statistics at the University of Bologna, when he prepared his thesis on the effects of deregulation on the U.S. and European aviation markets. Then he pursued his passion further by obtaining a Master’s Degree in Air Transport Management at Cranfield University in the U.K. followed by holding several management positions at various start-up carriers in Europe (Jet2, SkyEurope, Silverjet). After moving to Canada, he was Business Development Manager for IATA for nine years before turning to his other passion: sports writing.

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