Canadian startup Jetlines has shelved plans to begin flights in June due to regulatory delays and aircraft acquisition struggles, a development that leaves WestJet's Swoop in position to become the country's first ultra-low-cost carrier (ULCC).
"The key items remaining to commence flight operations are the completion of the licensing process, aircraft acquisition and completion of the financing process," says Jetlines in a media release.
"At this stage Jetlines is in advanced negotiations with several major aircraft lessors to secure the aircraft required to support both its start-up and growth plans," the company adds. "However, it will not attain a June 2018 start-up date as previously projected."
The company may provide a new launch timeline during the second quarter, it says.
"In the interim, Jetlines continues to advance its efforts with personnel recruitment, airport agreements, the licensing process and the financing plan," according to the company.
Jetlines has for months promoted a plan to launch flights in June from Hamilton and Kitchener-Waterloo, both of which are in Ontario about 80km (50 miles) from Toronto. It also planned flights from Halifax.
The company aimed to become Canada's first ULCC with a business plan resembling that of established discounters Spirit Airlines and Ryanair.
The company last year announced it signed agreements with an unnamed US lessor to lease two Boeing 737-800s.
But, it now says those aircraft are unavailable.
”Jetlines previously secured aircraft under an [letter of intent]. However, the lessor was unable to provide a definitive delivery date," the company's release says.
The company also has orders for five 737 Max 7s, with deliveries scheduled for 2023 and 2024.
Jetlines attributes its fleet acquisition struggles to broader developments in the commercial aircraft market, including problems with Pratt & Whitney PW1100G engines that power Airbus A320neos. Various issues with those engines have delayed Airbus's A320neo deliveries to airlines.
Jetlines also cites increased demand from cargo airlines for 737-800s and, more generally, strong worldwide air travel demand.
"All of these factors have led to increased demand and decreased supply of used aircraft available for lease," Jetlines says.
With Jetlines out of the game for the near future, WestJet stands to enter the ULCC market unopposed with its Swoop unit.
WestJet created Swoop to capture demand from the ultra-discount market segment. The unit will operate 189-seat 737-800s.
Though Swoop ignited a dispute between WestJet and its pilots, the company has insisted Swoop will begin flights on 25 June.
Jetlines has been seeking to get off the ground for several years. It received a boost in late 2016 when the Canadian government granted it an exemption from a 25% cap on foreign ownership, setting the cap instead at 49%.
Soon after Jetlines raised start up cash through a public offering of stock and announced its intention to start flights in summer 2017.
That never happened.
Still, Jetlines appeared to be progressing toward launch. The company in 2017 hired former Sun Country Airlines chief executive Stan Gadek as its CEO, succeeding former head Jim Scott.
Source: Cirium Dashboard
