CGTSN
26th Feb 2005, 21:58
Low-fare Jetsgo must fly at lower altitude
Transport Canada revokes certificate
By BRENT JANG
Wednesday, February 23, 2005
Updated at 4:50 PM EST
In the dogfight in the skies, discount airline Jetsgo Corp. can rest assured that its rivals won't be anxious to match a different kind of low -- flying at lower altitude.
Transport Canada has revoked an operating certificate that allowed Jetsgo to fly between 29,000 and 41,000 feet, forcing the carrier to run its flights at 28,000, an altitude less efficient for fuel consumption.
Montreal-based Jetsgo, which emphasizes its low fares, began flying at the lower level last Friday. It is playing down the temporary loss of the certificate, saying that internal flight manuals are being updated to comply with Transport Canada's request for updated information.
Once "minor revisions" are made to the Jetsgo manuals, the carrier expects to return to higher altitude by the middle of next week, Jetsgo director of flight operations Ron Henry said yesterday.
"The higher you fly, the better the fuel-efficiency because the air is cooler and less dense. There's less drag on your airplane, and hence, less fuel is burned," Mr. Henry said.
Transport Canada said it was concerned about some deficiencies in the airline's manuals detailing procedures related to the so-called Reduced Vertical Separation Minimum (RVSM). That refers to regulations that allow an airplane to fly as close as 1,000 feet above or below another aircraft at altitudes between 29,000 and 41,000 feet.
Since 1997, the aviation industry has been shifting to 1,000 feet of spacing between aircraft at higher altitudes, less than the previous gap of 2,000 feet.
New rules affecting North America and the Caribbean took full effect last month.
Transport Canada spokeswoman Lucie Vignola said federal department inspectors discovered certain incomplete descriptions in Jetsgo manuals after being alerted about a "missed approach" by a Jetsgo plane landing at Calgary International Airport in late January. In that incident, the aircraft skidded partly off the runway and also hit a sign, prompting a federal Transportation Safety Board investigation.
Ms. Vignola said the revoked certificate will be reinstated after Jetsgo fulfills certain conditions, such as amending its equipment list and updating manuals and training programs.
Jetsgo officials said the extra fuel costs incurred at lower altitude will translate into a relatively small increase in expenses at the privately owned carrier. In one instance, a Jetsgo flight from Toronto to Los Angeles had to refuel in Las Vegas before reaching its destination.
TD Newcrest analyst Brian Morrison said there would potentially be "negative cash flow implications" for Jetsgo.
Investors and analysts have been speculating about the financial health of Jetsgo amid brutal fare wars. In a research note yesterday, Mr. Morrison said that while he isn't convinced of any imminent Jetsgo demise, its strategy of relying on advance ticket sales to help pump up growth could falter.
He said if Jetsgo were to drop out as a rival, then WestJet Airlines Ltd. shares could receive a boost of $5 a share above his one-year target price of $13.50 on the Toronto Stock Exchange. WestJet stock fell 36 cents to $12.20 yesterday.
"Should Jetsgo endure the seasonally weak winter months, we assume at a minimum, that Jetsgo will make it to next winter," Mr. Morrison wrote.
He said that with Calgary-based WestJet expanding its inventory of fares in the lower-price class, it's taking aim at Jetsgo in the fierce battle for passengers.
Mr. Morrison noted that Jetsgo's difficulties include recovering from negative publicity after passengers were left stranded after Jetsgo cancelled flights in a Toronto winter storm before Christmas.
Jetsgo spokesman Tom MacMillan said the TD Newcrest report raises some old concerns that don't reflect Jetsgo's strength as an upstart airline. Jetsgo, which began operations in mid-2002, has now captured 8 per cent of domestic market share. Montreal-based Air Canada and its Jazz subsidiary have a 62-per-cent share, while WestJet holds 28 per cent and CanJet Airlines, owned by IMP Group International Inc. of Halifax, has 2 per cent.
Transport Canada revokes certificate
By BRENT JANG
Wednesday, February 23, 2005
Updated at 4:50 PM EST
In the dogfight in the skies, discount airline Jetsgo Corp. can rest assured that its rivals won't be anxious to match a different kind of low -- flying at lower altitude.
Transport Canada has revoked an operating certificate that allowed Jetsgo to fly between 29,000 and 41,000 feet, forcing the carrier to run its flights at 28,000, an altitude less efficient for fuel consumption.
Montreal-based Jetsgo, which emphasizes its low fares, began flying at the lower level last Friday. It is playing down the temporary loss of the certificate, saying that internal flight manuals are being updated to comply with Transport Canada's request for updated information.
Once "minor revisions" are made to the Jetsgo manuals, the carrier expects to return to higher altitude by the middle of next week, Jetsgo director of flight operations Ron Henry said yesterday.
"The higher you fly, the better the fuel-efficiency because the air is cooler and less dense. There's less drag on your airplane, and hence, less fuel is burned," Mr. Henry said.
Transport Canada said it was concerned about some deficiencies in the airline's manuals detailing procedures related to the so-called Reduced Vertical Separation Minimum (RVSM). That refers to regulations that allow an airplane to fly as close as 1,000 feet above or below another aircraft at altitudes between 29,000 and 41,000 feet.
Since 1997, the aviation industry has been shifting to 1,000 feet of spacing between aircraft at higher altitudes, less than the previous gap of 2,000 feet.
New rules affecting North America and the Caribbean took full effect last month.
Transport Canada spokeswoman Lucie Vignola said federal department inspectors discovered certain incomplete descriptions in Jetsgo manuals after being alerted about a "missed approach" by a Jetsgo plane landing at Calgary International Airport in late January. In that incident, the aircraft skidded partly off the runway and also hit a sign, prompting a federal Transportation Safety Board investigation.
Ms. Vignola said the revoked certificate will be reinstated after Jetsgo fulfills certain conditions, such as amending its equipment list and updating manuals and training programs.
Jetsgo officials said the extra fuel costs incurred at lower altitude will translate into a relatively small increase in expenses at the privately owned carrier. In one instance, a Jetsgo flight from Toronto to Los Angeles had to refuel in Las Vegas before reaching its destination.
TD Newcrest analyst Brian Morrison said there would potentially be "negative cash flow implications" for Jetsgo.
Investors and analysts have been speculating about the financial health of Jetsgo amid brutal fare wars. In a research note yesterday, Mr. Morrison said that while he isn't convinced of any imminent Jetsgo demise, its strategy of relying on advance ticket sales to help pump up growth could falter.
He said if Jetsgo were to drop out as a rival, then WestJet Airlines Ltd. shares could receive a boost of $5 a share above his one-year target price of $13.50 on the Toronto Stock Exchange. WestJet stock fell 36 cents to $12.20 yesterday.
"Should Jetsgo endure the seasonally weak winter months, we assume at a minimum, that Jetsgo will make it to next winter," Mr. Morrison wrote.
He said that with Calgary-based WestJet expanding its inventory of fares in the lower-price class, it's taking aim at Jetsgo in the fierce battle for passengers.
Mr. Morrison noted that Jetsgo's difficulties include recovering from negative publicity after passengers were left stranded after Jetsgo cancelled flights in a Toronto winter storm before Christmas.
Jetsgo spokesman Tom MacMillan said the TD Newcrest report raises some old concerns that don't reflect Jetsgo's strength as an upstart airline. Jetsgo, which began operations in mid-2002, has now captured 8 per cent of domestic market share. Montreal-based Air Canada and its Jazz subsidiary have a 62-per-cent share, while WestJet holds 28 per cent and CanJet Airlines, owned by IMP Group International Inc. of Halifax, has 2 per cent.