Airline startup Canada Jetlines has sued industry executive David Neeleman and two Neeleman-affiliated companies, alleging they unlawfully derailed Jetlines’ financing plans as they poached Jetlines former chief executive Lukas Johnson.
Airline startup Canada Jetlines has sued industry executive David Neeleman and two Neeleman-affiliated companies, alleging they unlawfully derailed Jetlines’ financing plans as they poached Jetlines former chief executive Lukas Johnson.
Johnson left Jetlines, which has not yet started flights, in late 2018 to work for Neeleman’s planned US startup, Moxy Airways.
A lawsuit filed by Jetlines in US District Court for Connecticut seeks at least $27 million in damages, saying Neeleman and his affiliates intentionally disrupted Jetlines’ business plans, violating Connecticut trade laws.
The suit names Neeleman-affiliated companies DGN Corporation and Breeze Aviation Group, which it says is behind Moxy. It does not name Johnson.
Neeleman, who founded Brazil’s Azul and remains that company’s board chair, could not immediately be reached for comment through Azul. Neeleman also started Canadian carrier WestJet and US carrier JetBlue Airways.
The suit, filed on 19 November, says he lives in Connecticut.
Vancouver-based Jetlines also did not immediately respond to a request for comment.
Jetlines alleges Neeleman and his companies “embarked upon a predatory scheme to destroy the relationships” between Jetlines, its former CEO Johnson and an unnamed “leading international investment bank”.
Jetlines was working with the bank to raise $80 million in startup funds, it says.
The “purpose and result” of those actions was to cause “the bank to terminate its engagement to assist Jetlines in raising the new investment capital that was and is essential to Jetlines ability to commence operations,” the suit says.
Jetlines has worked for years to get financing to launch an ultra-low-cost carrier in Canada. The process has involved another lawsuit and now several failed financing attempts.
Jetlines, with the bank’s blessing, hired former Allegiant Air executive Johnson as CEO in 2018. Under Johnson, Jetlines agreed to lease two Airbus A320s from AerCap, and planned to launch flights in June 2019.
Johnson worked with the bank to draw up a list of potential investors, including Neeleman and DGN, which were then developing their Moxy plan, says the suit.
Moxy holds 60 A220 orders aims to begin flights in mid-2021, Neeleman has said.
The suit alleges Neeleman and his affiliates interfered with the bank deal as they poached Johnson to work for Moxy. They “induced” Johnson to participate in meetings and to sign a nondisclosure agreement, which breached Johnson’s duties to Jetlines, the suit says.
“Neeleman’s overriding purpose in that deception was to derail Jetlines’ relationship with the bank and thereby to delay and hinder Jetlines from obtaining new financing and commencing operations,” Jetlines alleges. “In that, he succeeded.”
In August 2018, Johnson resigned from Jetlines to take a commercial strategy position at Moxy. Shortly after, Neeleman phoned the bank’s managing director to announce he “hired away” Johnson, says the suit.
In response, the bank backed out of the Jetlines financing deal.
“His surprise announcement caused the bank immediately to suspend its efforts to procure new financing for Jetlines,” says the suit.
