Jetlines stalled by foreign investment limit

Eleanor Steed
By Eleanor Steed September 20, 2016 09:58

Jetlines stalled by foreign investment limit

Canada Jetlines, the new ultra-low-cost airline, is still waiting on a final decision to its formal request for an exception from the country’s 25% foreign direct ownership rules. The Canadian Minister of Transport Marc Garneau and Transport Canada have launched an industry consultation to determine if the request was in the public interest. The decision has not yet been made and Garneau’s office has told Jetlines it wasn’t likely to make a decision any time soon. Jetlines CEO Jim Scott expressed his frustration in a memo to stakeholders on Monday.

Until the exemption is granted, Jetlines will not be awarded a federal airline license. The airline needs to have finance in place to cover 90 days of operations, which is approximately $27 million. Although the airline has that in place, it is from European and American investors, which at 49% of the total will be more than the 25% limit foreign investment cap.

“Jetlines has spent a lot of time, money and effort to offer Canadians the opportunity to have more flights from underserved or unserved airports, and to stimulate new passengers with lower prices,” Scott said in the memo, which was reproduced by a local newspaper. “However, unless an exemption order is granted and a clear timeline provided by the Minister in the coming weeks, this opportunity will simply be lost. Neither Jetlines nor its investment partners are in a position to wait for an overall policy change.”

Jetlines intends to fly up to 64 domestic and international routes within eight years, mostly out of Winnipeg, which would include direct flights to Edmonton, Ottawa and Thunder Bay and US destinations Los Angeles, Las Vegas and Phoenix.

Eleanor Steed
By Eleanor Steed September 20, 2016 09:58