Skyservice jet's sized
WINNIPEG — Two Canadian airport authorities have seized aircraft belonging to defunct vacation charter provider Skyservice and are holding them in an effort to recover unpaid bills from the company.
The Greater Toronto Airports Authority is owed $221,038 and it has seized six Skyservice planes that were parked at the Pearson Airport in Toronto.
The Winnipeg Airports Authority has also seized two of Skyservice's Boeing 757 jets and is suing Skyservice Airlines for $451,491, money owed from unpaid landing and terminal fees, as well as airport improvement fees that the airlines collected on the airport's behalf.
The two jets seized in Winnipeg were parked at Richardson Airport when the company was placed into receivership late last week.
Barry Rempel, the CEO of the Winnipeg Airports Authority, said that because an airport cannot refuse to allow airlines to use the facilities, it has the right to seize assets when airlines do not pay their bills.
The Boeing 757 seats 180 passengers.
Skyservice folded suddenly at the end of March after 25 years in the highly competitive Canadian travel-tour business.
The Toronto-based charter airline abruptly halted its operations and filed for receivership in the Ontario Superior Court of Justice after its majority stakeholder, Gibralt Capital Corp., and one of its key partners, Sunquest Vacations, a division on Thomas Cook PLC, called in their loans with the carrier.
One thousand people were thrown out of work in Canada and the U.S. by the move.
Skyservice was the latest victim in the industry, joining the ranks of Zoom Airlines and Conquest Vacations, which folded last year.
At issue is an excess of packaged tours in the market that has been a drag on prices and the profitability of the players. Market leader Transat A.T. said recently it expects a loss in the second quarter, traditionally its strongest point of the year, for the first time in its history.
Skyservice also was saddled with a sizable debt stemming from a leveraged buyout in 2007 by Vancouver-based Gibralt, which owns 94 per cent of the company through a numbered Canadian account.
Skyservice's costs are 30 to 40 per cent higher than its competitors Canjet, WestJet and Sunwing. Almost three-quarters of its workforce was unionized.
Skyservice's fleet of 20 planes was leased.
With files from Canwest News Service