Another regional airline prepares for bankruptcy, cancels all flights

While some airlines are currently riding high travel demand that has continued since the post-pandemic reopening, others have struggled to stay afloat amid pressures ranging from high jet fuel costs and issues of providing aircraft to a limited customer base for regional airlines.

In 2024, Air Malta, Armenia’s FlyArna, Canada’s Lynx Air, and Antigua and Barbuda’s LIAT either filed for bankruptcy protection or ceased operations entirely. The tiny South Pacific country’s only main airline, Air Vanuatu, completely stranded many tourists and some locals going to nearby countries such as Australia when it suddenly canceled all its flights in May.

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Based in Mississauga, Ontario, Canada Jetlines went through a lengthy fundraising and approval process from the Canadian government (the country’s laws previously required Canadian airlines to have no more than 25% foreign investment) before they- and take maiden flight in September 2022.

“The company was unable to obtain the necessary financing to continue operations”

But the airline designed to transport Canadians to vacation destinations in the US and the Caribbean didn’t last long. On August 15, Canada Jetlines announced that it was ceasing all operations after struggling to find enough capital to continue operating – before this step it had unsuccessfully tried solutions such as additional debt, strategic transactions, equity and debt financing .

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While the airline is positioning the shutdown as temporary, nothing short of a last-minute takeover by an investor or other drastic change could change the situation. The closure also follows the resignation of four executives, including CEO Brigitte Goersch. In the statement, the airline said it plans to file for creditor protection to eventually restart operations.

“The company has pursued all available financing alternatives, including strategic transactions and equity and debt financings,” representative Erica Dymond said in a press release. “Unfortunately, despite these efforts, the company has been unable to obtain the necessary financing to continue operations at this time.”

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Affected by a canceled Canada Jetlines flight? Here’s what the airline says you should do

While representatives also said that “every effort” is needed to “assist passengers at this time,” the solution they offered is to contact the credit card company for the canceled flights — in other words, the company the airline simply does not have the funds to provide refunds. itself. Some of the affected flights include routes between Toronto and Montego Bay in Jamaica, Cancun in Mexico and Orlando in Florida.

Canadian low-cost airline Lynx Air also announced it is filing for bankruptcy protection in February 2024 due to similar issues related to high operating and fuel costs, as well as increased competition from the two main carriers country’s airline: Air Canada. (ACDVF) and WestJet Airlines.

The 38.9 million Canadians currently living in the country also frequently use US airlines such as United Airlines (UAL) and Delta (DAL) (or flights through their networks) to fly to places like Florida.

“Every time a new player wants to enter the market, there is only one certainty: they will lose money in the first eight, nine, at least 10 months and maybe even more,” Jacques Roy, professor of transportation management. at the HEC Montreal business school, he told local publication Global News. — So you need a good bank account.

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