Canada is losing yet another airline, as charter carrier Canada Jetlines has stopped flying…
Canada Jetlines cancels all flights amid crisis
Canada Jetlines has ceased all flights effective immediately, as the airline has been unable to raise the capital needed to continue operating. As a result, the company plans to file for creditor protection. Passengers with existing bookings on the airline are being told to contact their credit card company for a refund.
Per a spokesperson for the airline:
“The continuing operations of the Company have been dependent upon the Company’s ability to raise adequate financing and to grow the airline to the point where it can commence profitable operations. The Company has historically financed its future requirements through a combination of debt, equity or other facilities.”
“The company pursued all available financing alternatives including strategic transactions and equity and debt financings. Unfortunately despite these efforts, the company has been unable to obtain the financing required to continue operations at this time.”
For those not familiar with Canada Jetlines, the airline commenced operations in September 2022, just under two years ago. While the airline has a fleet of four Airbus A320s in a one cabin layout, these planes have primarily been leased out to other airlines, including Corendon Dutch Airlines.
Canada Jetlines operates a few dozen scheduled flights per month. The airline is based in Toronto (YYZ), and primarily operates international leisure routes, to destinations like Miami (MIA), Orlando (MCO), and Cancun (CUN).
The airline hasn’t been profitable since launch, which is of course a major issue. The airline said it needed to grow to become profitable, but couldn’t make that work. Even going back to shortly after launch, the company lacked a cohesive business plan. In early 2023, the airline first planned to operate domestic flights, but then backtracked, and decided to focus on international sun destinations, plus leasing out planes to other airlines.
Things got even worse in recent weeks, as in June 2024, the company’s previous CEO resigned. A new interim CEO was appointed, though this Monday, she quit, along with four board members.
Canada Jetlines is the second Canadian airline to cease operations this year, as Lynx Air ceased operations in February 2024.
Canadian aviation is tough…
As I always say, the airline business is challenging just about anywhere around the globe, but Canada is an especially tough market. Canada is a huge country (marginally larger than the United States in terms of land mass) with only 40 million people.
Travel demand in the country is highly seasonal, and the population is heavily concentrated in several major cities (roughly 13 million people live in the greater Toronto, Montreal, and Vancouver areas). On top of that, airport fees in the country are high, as are taxes for airline passengers. This greatly cuts into margins, especially for low cost, leisure airlines.
When you add up those factors, running an airline just isn’t easy. Despite that, we’ve seen all kinds of new startups in recent years, and on top of that, the existing players have continued to grow as well (like Porter, with its huge Embraer E195-E2 growth).
Bottom line
Less than two years after taking to the skies, Canada Jetlines has ceased operations, as the airline has run out of cash. The Canadian leisure airline was small, and primarily flew to international sun destinations. I can’t say I’m surprised by this development, given the challenges of operating in Canada, plus the carrier’s questionable business model.
What do you make of Canada Jetlines ceasing operations?
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