Aspiring ultra-low-cost carrier Canada Jetlines (TSX-Venture:JET) has delayed its launch and named December 17 as when it now plans to finally soar into the skies. Its shares plunged almost 29% to $0.42 early in the April 4 session before closing down close to 12%, to $0.52, by the end of the trading session.
The company previously announced that it would get possession of two Airbus A320 aircraft by June, and the expectation was that it would launch flights immediately because it would be expensive to keep the two planes grounded.
The airline's announced April 4 that it has scuttled that original deal to get the two Airbus A320 planes and that it has entered into a letter of intent with partner SmartLynx Airlines SIA to lease two alternate Airbus A320 planes that will be available for delivery in the fall.
The partnership with SmartLynx comes as a result of a financial transaction that provides up to $15 million. Canada Jetlines also has a partnership to access up to $14 million with a Korean special purpose fund that is led and established by InHarv Partners Ltd.
The later launch is not the first surprise that Canada Jetlines has had for shareholders this year.
In February, it announced that it had changed its strategy for serving the Lower Mainland and would fly out of Vancouver International Airport (YVR) instead of Abbotsford International Airport (YXX).
YXX had been Jetlines’ preferred airport because it has no airport improvement fee, and it has more affordable landing and terminal fees. YXX also recently enhanced its appeal to all airlines by opening an expanded terminal at the end of January.
Canada Jetlines' move to YVR made sense to some because YXX already serves two ultra-low-cost carriers: Flair Air and the WestJet Airlines Ltd. (TSX:WJA) subsidiary Swoop.
Canada Jetlines also explained that the move to YVR was because it is the second busiest airport in Canada, serving more than 25.9 million passengers in 2018, and it is the airport in the region with the largest catchment area.
YVR has since won the Skytrax award as being the best airport in North America for the 10th straight year - an achievement that Canada Jetlines executive chairman Mark Morabito tweeted a congratulatory message about and said that the airport's high ranking is partly what persuaded Canada Jetlines to choose to fly out of that airport.
Indeed, Canada Jetlines, in 2014, originally preferred to fly out of YVR as its Lower Mainland base. That was when they planned to launch in the spring of 2015.
Plenty of executive changes followed and the company in 2016 vacated office space that it leased in the main terminal of YVR.