Richmond-based Canada Jetlines announced April 13 that it has reached a definitive agreement to go public via a reverse takeover with former uranium miner Jet Metal Corp. (TSX-V:JET).
The news comes nearly a month after the two companies signed a letter of intent to amalgamate.
“The next steps going forward is to call shareholders meetings and that takes about 35 days from yesterday or today so they will probably be in the middle of May,” Jetlines vice-president John Korenic told Business in Vancouver April 13.
“Assuming that the agreement gets approved by both companies’ shareholders, we will go through the formalities of the TSX Venture Exchange and the company will begin trading as Canada Jetlines.”
The announcement comes a couple weeks after a second upstart no-frills airline NewLeaf Travel Co. announced that it had received federal approval to launch .
Jetlines intends to keep its business plan of being an ultra-low-cost carrier, where it would charge fares an average of 40% to 50% less than Air Canada and WestJet.
The catch is that Jetlines passengers would face a vast array of fees, including charges for carry-on and checked bags, meals and potentially perks such as in-flight iPads. Fees may also kick in if customers make reservations using credit cards instead of debit cards and they almost certainly will kick in if customers use the phone for reservations instead of the Internet.
Jetlines CEO Jim Scott told BIV on April 13 that initial flights from Vancouver could be to cities such as Reno, Nevada, Hamilton, Ontario and Prince George, B.C.
Jetlines originally proposed in early 2014 to go public via a reverse takeover of Inovent Capital Inc. (TSX-V: IVQ.P).
It even placed an order, worth US$438 million, for five of Boeing’s (NYSE:BA) 737 MAX aircraft, which are to be delivered in 2021.
The plan was to lease planes for a mid-2015 launch.
Then, Jetlines pivoted and abruptly cancelled plans to link with Inovent, saying that it was exploring other financing opportunities.
Inovent filed a petition in B.C. Supreme Court, seeking compensation for giving Jetlines a $120,000 loan in July 2014.
The parties settled out of court and former Jetlines president David Solloway told BIV last year that Jetlines still intended to launch.
Solloway, who has decades of experience in the aviation industry has left the company, Jetlines announced February 17.
The company has also parted ways with board members: Stan Gadek and Claude Morin.
Korenic came aboard last year after he retired as director of aviation marketing at the Vancouver Airport Authority.
(Image: Jetlines vice-president of commercial and IT operations, John Korenic, previously worked at the Vancouver Airport Authority)
Getting sufficient capital to operate is an outstanding challenge for Jetlines.
The Canadian Transport Agency has told Jetlines that it needs at least $40 million before it can operate.
Solloway, however, told BIV in 2014 that the company would need about $48 million to get the airline up and running. He said at the time that the ideal would be for Jetlines to have $100 million so it could rapidly expand.
Jetlines had at that point hired dozens of people and Solloway predicted that it would need 130 full-time employees at its launch. It is unclear how many people are currently on Jetlines' payroll.
