Richmond-based Canada Jetlines is once again poised for takeoff, following multiple delays.
The company, on February 17, announced a new plan to go public on the TSX-Venture Exchange by conducting a reverse takeover with uranium miner Jet Metal Corp. (TSX-V: JET).
“With this transaction Jetlines will have the working capital to move forward in earnest and we expect to be announcing a number of major developments in a timely manner,” said Jetlines president and CEO Jim Scott in a release.
The announcement comes a few weeks after upstart no-frills airline NewLeaf Travel Co. announced that it would postpone what was expected to be a February 12 launch.
That postponement is key because without NewLeaf competing in the market, Jetlines’ potential for success is thought to be much greater.
Jetlines intends to keep its business plan of being an ultra-low-cost carrier, where it would charge fares an average of 40% to 50% less than Air Canada.
The catch is that Jetlines passengers would face a vast array of fees, including charges for carry-on and checked bags, meals and perks such as in-flight iPads. Fees also kick in if customers make reservations using credit cards instead of debit cards or if they use the phone for reservations instead of the Internet.
Jetlines originally proposed in early 2014 to go public via a reverse takeover of Inovent Capital Inc. (TSX-V: IVQ.P).
It even placed an order, worth US$438 million , for five of Boeing’s (NYSE:BA) 737 MAX aircraft, which are to be delivered in 2021.
The plan was to lease planes for a mid-2015 launch.
Then, Jetlines pivoted, and abruptly cancelled plans to link with Inovent, saying that it was exploring other financing opportunities.
Inovent filed a petition in B.C. Supreme Court, seeking compensation for giving Jetlines a $120,000 loan in July 2014.
The parties settled out of court and former Jetlines president David Solloway told Business in Vancouver last year that Jetlines still intended to launch.
Solloway, who has decades of experience in the aviation industry , has left the company, Jetlines announced February 17.
The company has also parted ways with other executives or directors: Stan Gadek and Claude Morin.
The transaction with Jet Metal Corp. still requires TSX-Venture Exchange approval.
Getting sufficient capital to operate is an outstanding challenge.
The Canadian Transport Agency has told Jetlines that it needs at least $40 million before it can operate.
Solloway, however, told BIV in 2014 that the company would need about $48 million to get the airline up and running. He said at the time that the ideal would be for Jetlines to have $100 million so it could rapidly expand.
Jetlines had at that point hired dozens of people and Solloway predicted that it would need 130 full-time employees at its launch. It is unclear how many people are currently on its payroll.
