After announcing an optimistic launch last September, with its inaugural flight landing in Calgary, Canada’s newest discount airline has temporarily pulled out of the Calgary market and will focus on leasing its aircraft to another carrier.
Canada Jetlines began operations on Sept. 22 and was scheduled to service twice weekly flights from Toronto’s Pearson International Airport to Calgary International Airport.
But earlier this year, it quietly removed Calgary as a destination from its website. It currently flies travellers from Toronto to Vancouver, Las Vegas and Cancun and back.
The company’s chief commercial officer, Duncan Bureau, says the decision is temporary.
“We still believe Calgary is an important part of our market,” he said.
The original plan was to service Calgary year-round, Bureau says, but plans changed when the airline received an opportunity to lease one of its two aircraft and crew to another carrier.
Now, one of its planes is operating into high-demand destinations in Mexico and the United States and its other plane is dedicated to an ACMI (airplane, crew, maintenance and insurance) operation.
“We will be back into Calgary probably in the spring or fall of 2023,” said Bureau, though he says that depends on the airline’s ability to add new aircraft to its fleet.
Canada Jetlines currently has two Airbus A320s — an all-economy jet with 174 seats. Bureau says the plan is still to fly 15 aircraft by 2025.
Prioritizing ACMI operations
Bureau says Jetlines recently came off an ACMI contract, and has just signed another five-month daily contract.
ACMI operations are when airlines offer their airplane, crew (both cockpit people and cabin crew), maintenance and insurance to another individual or company. It operates completely on that individual or company’s schedule and under their marketing.
“What that does for Jetlines is it gives us guaranteed flying hours at a negotiated rate. So the risk for us is significantly less because someone else is taking the risk of the operating cost of the aircraft,” said Bureau.
Bureau wouldn’t say who the aircraft is being leased to, but he said it’s an attractive offer for airlines and they usually take the opportunity.
Order for 5 Boeing aircraft
Rick Erikson, an independent aviation analyst based in Calgary, says the entire situation would usually make him question the airline’s business plan and financials.
But that changed when he saw that Canada Jetlines recently ordered five brand new 737 MAX 7 planes from Boeing.
“Those aircraft are $50 million plus each, and I suspect there’s going to be some pretty good money put down to hold those delivery positions,” said Erikson.
“That gives me a little more confidence in Jetlines and certainly how deep their pockets are.”
Under the order, Canada Jetlines is added to a waitlist among other airlines. Erikson says Jetlines could be waiting until well into 2024, or even into 2025.
“I wouldn’t be surprised if they lease some 737 Max probably starting in the fall…and into the winter schedule to prepare themselves for when they take delivery of their own aircraft.”