Upstart airline Canada Jetlines will be able to attract more foreign investment and have non-Canadians own up to 49% of the company, the federal government announced November 3.
Jetlines, in May, asked for an exemption from federal rules that require foreign investors to have a maximum 25% voting interest in Canadian airlines. It then announced that move in June.
The request came because the airline had lined up foreign investors that were interested in investing in the ultra low-cost carrier (ULCC), which plans to charge fares that are an average of 40% to 50% less than Air Canada and WestJet.
In exchange for those low fares, Jetlines passengers would face a vast array of fees, including charges for carry-on and checked bags, meals and potentially perks such as in-flight iPads.
Fees may also kick in if customers make reservations using credit cards instead of debit cards and they almost certainly will kick in if customers use the phone for reservations instead of the Internet.
“Today's announcement will pave the way for Canadian air travellers to soon have access to jet air service in both unserved and underserved markets throughout the country and all Canadians will benefit from the lower airfares provided by a ULCC,” said Jetlines CEO Jim Scott.
“This is a great news announcement that will also create thousands of jobs and help stimulate local economies in communities all across Canada.”
Now that the issue of whether Jetlines can accept more foreign capital than previously allowed is resolved, the airline can focus on a planned business combination with Jet Metal (TSX-Venture:JET) so it can go public via a reverse takeover.
Jetlines is one of two new airlines in Canada that are focused on providing low-cost travel, although NewLeaf Travel Co., which is the other one, is really a travel company that markets flights operated by Flair Airlines. Newleaf launched operations in July.
When Transportation Minister Marc Garneau announced the exemption from federal foreign-ownership laws for Jetlines, he noted that Calgary-based charter airline Enerjet will also get the same exemption.
The federal government plans to introduce legislation to ease foreign ownership restrictions for all airlines although there is so far no timeline for when that bill will be tabled.
