Canada Jetlines suspends operations as problems with the airline continue

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Canada Jetlines Ltd. announced Thursday that it is temporarily suspending operations after four of its executives resigned on Monday, including CEO Brigitte Goersch.

The leisure airline, like all smaller Canadian airlines, has run into financial difficulties this year. It said it has been unable to raise the funds needed to continue flying and plans to seek creditor protection. Passengers with existing bookings should contact their credit card company for a refund.

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Trading in the company’s shares, which are traded on the NEO exchange, was suspended on Wednesday afternoon.

Headquartered in Mississauga, Ontario, Canada Jetlines was founded in September 2022 and offers charter and scheduled flights from Toronto to destinations across North America and the Caribbean.

However, one expert said the airline has been struggling to get planes in the air for some time, citing repeated requests for short-term financing to keep operations going.

John Gradek, a lecturer in McGill University’s Aviation Management Program, said Jetlines has been on the “brink of bankruptcy” for nearly a year.

“You need cash to survive in Canada,” Gradek said, pointing out that Canada Jetlines has positioned itself as an upscale airline, going after large, highly competitive markets rather than focusing on generating steady revenue and profits.

You need cash to survive in Canada

Johannes Gradek

He said the airline, with only six aircraft in service, had a lower chance of survival than mid-sized competitors such as Porter Airlines, which announced an expansion of its fleet last year.

The more worrying issue, Gradek says, is whether Canada’s commercial aviation market is broken. If Jetlines shuts down for good, it would be the third Canadian airline to cease operations this year, following the closure of ultra-low-cost carrier Lynx Air and the integration of Swoop into WestJet.

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Flair Airlines has also faced challenges: The CEO resigned this summer and the company must implement a payment plan to settle $67 million in unpaid federal taxes.

Gradek says Canada Jetlines’ financial problems are just “another nail in the coffin” for newer, smaller airlines.

At the beginning of the year, the Competition Bureau announced that it would conduct a market study on Canadian domestic air travel.

“Recent incidents such as the bankruptcy of Lynx Air have clearly shown that it may be more difficult for smaller airlines to operate in the Canadian market,” Anthony Durocher, deputy director of the office’s competition promotion division, told CBC in July.

Gradek also believes there is a lack of oversight of airlines like Canada Jetlines by Transport Canada, which manages their licenses. Gradek is a member of the Transportation Appeal Tribunal of Canada, a quasi-judicial federal body that holds hearings on Transport Canada decisions at the request of affected parties.

“Canada Jetlines’ license to operate should have been reviewed months ago and, in my opinion, suspended because Canadians need an airline they can trust, that has a good management model and is financially stable,” Gradek said.

“Our friends at Canada Jetlines had none of it.”

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