Air travel in Canada is… notoriously expensive. As a result, there have been quite a few new
entrants into the commercial airline sector here, all promising to bring lower fares with them.
One of these is Canada Jetlines, a startup airline that was first formed… ten years ago, in 2012.
Since then, they’d been seemingly getting
close to launching flights at various points, but not quite.
However, just in the past few weeks, their very first Airbus A320 has rolled out of
paint in Shannon, Ireland, which is a pretty significant milestone for them!
So, let’s take a look at the timeline of just how Jetlines got to this point
and what their plans are going forward.
Starting back in 2012, Jetlines was created with the intention of filling a void in the
Canadian airline market as the country’s first ultra-low-cost carrier. They had
initially planned to start operations in the fall of 2014 with two Airbus A319s,
based out of Vancouver International Airport.
Of course, with any start-up airline, raising enough capital is a significant barrier to entry,
and in the spring of 2014, the company was reportedly aiming to raise $100 million dollars
to get the airline up and running. As such, that fall 2014 launch date later became spring 2015.
In December of 2014 though, Jetlines made news with an order for 5 Boeing 737 MAX 7s,
with options for a further 16. These would be delivered starting in 2021,
and for a while, marked one of Boeing’s few MAX 7 customers. In the meantime,
the company was pursuing some older 737s for their initial operations.
Following some legal turmoil between Jetlines and a former investor in 2015,
while continuing their efforts to raise capital, Jetlines did get a few wins in 2016.
In April, they formally asked the Government of Canada to increase the limit for the foreign
ownership of Canadian airlines from 25% to 49%. Doing so would facilitate international
investment into Jetlines, and there were reportedly several interested parties.
Later that year, the federal government began plans to increase those foreign ownership limits,
and also granted an immediate exemption to both Jetlines and fellow low-cost startup, Enerjet.
In February of 2017, Jetlines completed the reverse takeover process of Jet Metal,
a publicly traded shell company. Doing so allowed Jetlines to go public on the Toronto
Stock Exchange, thus bringing in more funding. Following a change in leadership in the summer
of 2017, Jetlines aimed to finally launch flights in the summer of 2018.
It was also this summer that the airline rebranded, changing their still-conceptual
look from the Frontier-esque blue and green livery, to a red, blue, and silver one instead.
In September, a letter of intent for two Boeing 737-800s was signed with an
American aircraft lessor. These were aimed to be delivered in April 2018,
which would set them up for a launch that summer.
However, this lessor wasn’t able to provide a definitive delivery date.
Jetlines said in a statement in March that “the current market for leased aircraft has tightened
considerably during 2017 and early 2018”, owing to the A320neo engine issues at the time
as well as demand for 737-800 freighter conversions. As a result, this summer
2018 launch would no longer take place, and the airline would not be flying these 737s.
In June, Jetlines signed another lease agreement, but this time for two Airbus
A320s from global aircraft lessor AerCap, for delivery “by the first half of 2019”.
Also in late 2018 and early 2019, Jetlines secured some major investment, up to $15
million dollars from Latvian airline SmartLynx and up to $14 million from a South Korean fund.
Throughout the start of 2019, Jetlines reached a number of agreements with airports,
ground handling providers, and booking services. Things seemed to be coming together,
and a date for starting operations was finally set - December 17th, 2019.
But what about those A320s? Well, in April,
Jetlines and AerCap decided to terminate those A320 leases, with Jetlines instead
taking two other A320s from SmartLynx to be delivered in time for this December launch.
In June of 2019, Jetlines also rebranded… again, ditching the blue, red, and silver for… a bold
orange and black livery. According to a statement, the new brand was intended to be deliberately
distinct from existing Canadian airlines, with a tagline of “Flying sucks less when you pay less”.
Throughout 2019, Jetlines continued to sign more agreements, and seemed
to be getting closer and closer to launching.
Unfortunately though, all of this wasn’t quite enough to secure additional funding,
and after Jetlines was unable to meet a funding target, both SmartLynx and that South Korean fund
pulled their investments. The company put its plans on hold once again, and laid off
most of its employees aside from a small team who would continue to try and secure funding.
According to a statement from Jetlines, potential investors were concerned with
how aggressively Air Canada and WestJet would react to them once they’d started
operations. Even prior to this loss of investment, Jetlines representatives had
reportedly made multiple appearances before Canada’s Competition Bureau on the matter.
After this point, the company had seemed to go
relatively quiet. That’s not to say that there wasn’t work taking place though.
Just two months later in December, Jetlines announced that they would be
combining themselves with American charter airline startup Global Crossing Airlines.
According to them, this move would “preserve Jetlines’ long term strategy”,
providing an opportunity for them to continue with a Canadian operation when the time is right.
Global Crossing would take over Jetlines in another reverse takeover,
acquiring all of Jetlines’ assets and what was left of the company.
The deal closed in 2020, and being backed by “two Miami private equity firms”,
Global Crossing presumably had much more financial support than Jetlines did.
Also in 2020, those 737 MAX orders were officially cancelled,
though some sources say these were off the table even earlier.
In September of 2020, Global Crossing announced their plans to spin-out or
separate the Canada Jetlines division. This would create or rather re-create Jetlines
as a stand-alone company, with Global Crossing investors holding some shares.
That spin-out was completed in June of 2021,
and that’s essentially where Jetlines finds itself today - keeping their most recent logo
but seemingly dropping the “flying sucks” line and tweaking the livery slightly.
However, this newest iteration of Jetlines has shifted focus
towards becoming a leisure and charter airline focusing on sun destinations,
as opposed to their previous ultra-low-cost carrier ambitions.
With Flair established in the domestic market, and Lynx Air also planning to
start with domestic flights, this was probably a good call for Jetlines.
According to an update from their management in December, the events of 2020 have created
what they call the best opportunity to start an airline in over 20 years.
Part of this is that aircraft leasing costs are significantly lower than they were pre-2020,
along with vendor contract costs. Being a start-up and having a clean slate without any
of the debt that existing carriers would have incurred over the past two years,
also gives them a distinct advantage.
Having signed a lease agreement with Jackson Square Aviation in December,
their first Airbus A320 went into paint that month, and rolled out around Christmas.
This first A320 will be delivered to Jetlines in Toronto around February or March of 2022,
with two more joining in the summer. They plan to start in Toronto,
before expanding to the rest of the country and flying up to 15 airplanes by June of 2025.
With all of that in mind, after ten years of trying it seems that this year may finally
be the one for Canada Jetlines. The change in direction to focus on sun flying rather than an
increasingly competitive domestic market may actually be in their best interest.
Of course, in targeting the sun market, Jetlines won’t have just Air Canada and WestJet to compete
with, but also Sunwing and Air Transat. This will not mean less competition by any stretch,
but there may be more opportunity for growth there rather than the domestic-only market.
Given that there’s now an actual airplane painted in their livery for the first time
in the company's history, I’m inclined to say that this 2022 launch is very promising.
In any case, it’s safe to say 2022 will be quite the year for the Canadian aviation industry.
I wish Jetlines the best of luck and I look forward to trying them out some day!
Thank you so much for watching as always, and I’ll see you in the next one.