May 12, 2016
Today the Canadian Transportation Agency (CTA) issued Jetlines a new Stage 1 letter stating Jetlines’ financial requirement to receive an airline licence (financial fitness) is now $27 million, and 50% of this amount can be a line of credit - “…the Agency has determined the financial requirement specified in section 8.1 of the ATR to be $27.233 million. The Agency makes this determination on its understanding that Jetlines will operate its air service using two Boeing 737-700 aircraft during the first 90 days of operation.” This financial fitness determination is significantly less than the previous CTA Stage 1 letter that had required $40M in financing.
Jetlines appreciates the time and effort the CTA has taken on calculating these revised values, and fully supports the requirement that new airlines in Canada must have sizable internal cash positions on hand. This CTA development significantly reduces the licencing requirements at the same time Jetlines is working with Jet Metal to list on the TSX.V. Jetlines is committed to launch as Canada’s first Ultra Low Fare Airline offering lower airfares to all Canadians. However, Jetlines intends to make its airfare offers while still protecting the travelling public by having the funding to operate the flights for which the tickets will be sold. Jetlines is using this more conservative approach rather than other models that have recently, and may again, be offered to the travelling public with questionable flight cancellation rates. Jetlines acknowledge the public’s continued support and looks forward to flying the Canadian skies soon!
Estimates the demand for lower airfare in Canada equals a market of 10 million new passenger trips per year flying domestically, to the USA, Mexico and the Caribbean;
Believes that this 10 million passenger market is currently unserved;
With a clean sheet opportunity, has the ability to structure its costs as a ULCC airline to dominate this 10 million passenger market, which equals 60 new Boeing 737-700 aircraft;
Is led by a knowledgeable management team with Canadian and international experience who understand the airline industry and is supported by an accomplished Board of Directors;
Plans to offer base airfares significantly lower than those of major existing carriers in Canada;
Intends to offer high levels of service with on demand in-flight service;
Plans to, where possible, use non-major airports in Canada to attract new passengers;
Has signed a definitive purchase agreement with The Boeing Company to acquire up to twenty-one (21) Boeing 737 MAX aircraft for delivery commencing in 2021. The Agreement includes five (5) firm orders, purchase rights for an additional sixteen (16) 737 MAX and some conversion rights to the 737-8 MAX aircraft; and
Has constructed a detailed 40 aircraft route structure model and business plan to cover the first eight years of operations; and
Jetlines has completed Phase 2 of a four phased approach to establish Canada Jetlines as the first Ultra Low Cost Carrier (“ULCC”) airline in Canada:
Phase 1 – Feasibility and Initiation;
Phase 2 – Planning and Development;
Phase 3 – Plan Execution (build-out); and
Phase 4 – Operations.
Jetlines is currently in the process of securing institutional funding for Phase 3 and 4.