Canada Jetlines files for creditor protection, begins restructuring process

Canada Jetlines will restructure its affairs, officially announcing that it has filed a notice of intention to make a proposal pursuant to Canada’s Bankruptcy and Insolvency Act (BIA).

According to a press release issued Wednesday (Aug. 21), BDO Canada Limited has been appointed as the proposal trustee on behalf of the Mississauga, ON-based airline, which ceased operations last week.

It will assist the company in its restructuring efforts while Dentons Canada LLP will serve as Jetlines’ legal counsel, the release says.

A Notice of Intention is the first stage of a restructuring process under the BIA, which allows a company to restructure its affairs while its assets are protected from claims, creditors and contractual counterparties.

This initial “stay period” lasts 30 days and may be extended by a court order.

Cash flow crisis

Canada Jetlines is a value-focused leisure carrier that was founded in 2013 and commenced operations in Canada in 2022.

Last week, the airline, which flew mostly to sun destinations like Orlando, Cancun and Jamaica, grounded its airplanes amid a cash flow crisis.

READ MORE: Canada Jetlines announces imminent closure

In a statement at the time, company spokesperson Erica Dymond said Jetlines 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,” Dymond said, as reported by the Canadian Press. 

The shutdown followed the resignation of four board members last Monday, including Jetlines’ CEO Brigitte Goersch, as PAX reported earlier.

Jetlines managed to grow its fleet to four aircraft, which were all Airbus A320s. By the end of this year, the airline was aiming to add more planes (by 2026, it was hoping for 15).

In addition to serving a handful of sun destinations, at lower-than-usual prices, the carrier provided charter flights for sports teams, like the CFL’s Ottawa Redblacks, and other leases.

The airline, for example, had an ACMI agreement with Air Arabia Maroc in Casablanca this summer.

Canada Jetlines becomes the latest victim of Canada’s cutthroat aviation sector, joining others that have bit the dust in recent months, such as Lynx Air, which closed in February, and WestJet’s budget carrier Swoop, which folded last October.

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