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Canada Jetlines announced today that it has made a voluntary assignment in bankruptcy for the benefit of its creditors pursuant to section 49 of the Bankruptcy and Insolvency Act (Canada) ("BIA").
The company has appointed BDO Canada as the Licensed Insolvency Trustee to manage the realization of the company's assets. Dentons Canada LLP is serving as legal counsel to Canada Jetlines.
Creditors will receive a notice of bankruptcy and details about the first meeting of creditors by mail in the coming days. This development marks a significant turn of events for the Canadian airline, potentially impacting its operations, employees, and stakeholders.
Last month, the carrier had announced it is grounding all flights and temporarily ceasing airline operations with immediate effect, becoming the latest casualty in Canada's troubled commercial airline industry.
The company followed the foot steps of the European low-cost airlines such as Ryanair and easyJet by offering affordable flights to a specific segment of passengers.
The carrier, which primarily served sun destinations from Toronto, announced on Thursday, August 15, that it has been unable to secure the necessary capital to continue operating and intends to file for creditor protection.
The shutdown resulted after the resignation of four executives on Monday, August 12, including CEO Brigitte Goersch. It also marks another airline's exit from Canadian skies following the closures of Lynx Air and budget carrier Swoop within the past year.
Mississauga based Canada Jetlines launched its first flight in September 2022, serving Canadian travellers within the country and to destinations in the U.S., Caribbean and Mexico. The carrier also provided charter flights for sports teams and businesses, leasing its fleet to other airlines during the summer months.
Last month, Erica Dymond, a spokeswoman for the airline, said in a presser:
“ The company… pursued all available financing alternatives, including strategic transactions and equity and debt financing. Unfortunately, despite these efforts, the company has not been able to obtain the financing necessary to continue its operations at this time .”
Former CEO Eddy Doyle described the carrier as a leisure airline, though it was initially intended to be an ultra-low-cost carrier. That business model was later abandoned due to high taxes on discount fares in Canada and the difficulty of competing with industry giants Air Canada and WestJet.
Worth noting here, aiming expansion, the airline had unveiled a new route connecting Toronto to Miami and had also entered an ACMI agreement with Air Arabia Maroc in Casablanca for the summer.
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