rotornut
30th Mar 2005, 11:54
globeandmail.com
Jetsgo founder plans revival Aims to sell planes to cut debt, use leased aircraft; sources peg June 25 as target date By BRENT JANG
Wednesday, March 30, 2005 Updated at 5:08 AM EST
From Wednesday's Globe and Mail
Jetsgo Corp. founder Michel Leblanc has devised detailed plans to get his insolvent carrier back in the air this summer, relying on aircraft sales to slash debt and counting on eight leased planes for the revival.
Less than three weeks after leaving thousands of travellers stranded, Mr. Leblanc has crafted an ambitious timetable to resurrect the airline, setting June 25 as the target for a rejuvenated Jetsgo's first flights using leased Boeing MD-83s, sources said yesterday.
"He's hoping to salvage some type of airline business because that's all he knows. He's trying to reinvent himself one more time and he would only use leased aircraft," said one lawyer familiar with Jetsgo's comeback strategy under bankruptcy protection.
Mr. Leblanc confirmed yesterday that he and his management team are preparing plans to resume operations beginning in the busy summer season with a slimmed-down airline, but he declined to comment on specific target dates.
He said the silver lining from the bad publicity for Jetsgo is that Canadian consumers know the brand instantly, so the challenge will be to market a comeback theme.
"I admit that the Jetsgo brand has blemishes, but its awareness has picked up.
"So, there's a downside and a good side," Mr. Leblanc said.
Jetsgo's fleet of 29 aircraft consists of 15 company-owned Fokkers, parked in Quebec City, and 14 leased Boeing MD-83s -- eight in Toronto and the rest located in Vancouver and Montreal.
A key to rescuing the carrier will be persuading the lessors that it's best to stick with Jetsgo, rather than finding another airline to pick up the MD-83 leases.
Mr. Leblanc, who hopes to persuade creditors and consumers to give him another chance, said he expects that Jetsgo will sell off the 15 Fokkers and liquidate other assets under the supervision of court-appointed monitor RSM Richter Inc. Hours before filing for bankruptcy protection on March 11, Jetsgo supervisors directed the bulk of Fokker pilots to fly the aircraft to Quebec City, under the guise of maintenance checks, for safe haven from creditors.
Toronto law firm Cassels Brock & Blackwell LLP is the lead representative of the aircraft lessors. Eight to 14 MD-83s could form Jetsgo's reduced fleet, sources said.
Under the proposal to breathe new life into Jetsgo, the carrier's lawyers are expected next week to ask the Quebec Superior Court to extend the April 11 deadline for Jetsgo to file a plan of arrangement to reorganize the airline.
The Montreal-based company, controlled by Mr. Leblanc, would then hold discussions with creditors in the hope of filing its restructuring plan by May 15 and have creditors review that proposal in the first week of June, sources said.
The Jetsgo president said no decision has been made yet on whether to change Jetsgo's name and whether the restructured business should be a chartered or commercial carrier.
When the discount airline filed under the Companies' Creditors Arrangement Act nearly three weeks ago, 17,000 passengers were left stranded and more than 1,200 employees lost their jobs.
The Greater Toronto Airports Authority, overseer of Pearson International Airport, would want "stringent financial rules" in place before approving any Jetsgo reorganization plan, GTAA spokeswoman Connie Turner said.
She said Jetsgo decided against declaring bankruptcy, preferring to go the CCAA route to buy itself some time to regroup.
"Frankly, we were quite surprised that they went under CCAA, considering that they shut down and they let their employees go," Ms. Turner said.
"I just think it would be a hard sell for the whole industry just because of the damage to their reputation and leaving a lot of creditors hanging out there."
The GTAA says it's owed $5.5-million by Jetsgo. The largest single creditor is credit card clearing agent Moneris Solutions Corp., which is owed at least $30-million.
Jetsgo would require safety approvals from Transport Canada, but Mr. Leblanc expressed confidence that he could get the green light from Ottawa since Jetsgo already holds certain operating certificates and licences.
A job fair, organized by the Toronto Board of Trade, will be held today for former Jetsgo employees. Mr. Leblanc said his scaled-down airline would need a smaller work force, and there are provisions to recall staff who belonged to the Teamsters Canada union, including flight attendants and ground crew.
One industry source said that while creditors are well aware of Mr. Leblanc's track record of heading or being closely linked with four airlines that didn't survive, the aviation entrepreneur could still win over some jaded creditors by stressing the prospect of redemption.
Jetsgo lost more than $55-million in the eight months prior to its grounding and has $108-million in liabilities, but Mr. Leblanc insists that with a new business model, a turnaround is in the offing.
"If we can craft a plan that makes sense commercially and brings back a business that's profitable, why not? We're looking at our strengths and weaknesses. We have to act responsibly. There's a good management
Jetsgo founder plans revival Aims to sell planes to cut debt, use leased aircraft; sources peg June 25 as target date By BRENT JANG
Wednesday, March 30, 2005 Updated at 5:08 AM EST
From Wednesday's Globe and Mail
Jetsgo Corp. founder Michel Leblanc has devised detailed plans to get his insolvent carrier back in the air this summer, relying on aircraft sales to slash debt and counting on eight leased planes for the revival.
Less than three weeks after leaving thousands of travellers stranded, Mr. Leblanc has crafted an ambitious timetable to resurrect the airline, setting June 25 as the target for a rejuvenated Jetsgo's first flights using leased Boeing MD-83s, sources said yesterday.
"He's hoping to salvage some type of airline business because that's all he knows. He's trying to reinvent himself one more time and he would only use leased aircraft," said one lawyer familiar with Jetsgo's comeback strategy under bankruptcy protection.
Mr. Leblanc confirmed yesterday that he and his management team are preparing plans to resume operations beginning in the busy summer season with a slimmed-down airline, but he declined to comment on specific target dates.
He said the silver lining from the bad publicity for Jetsgo is that Canadian consumers know the brand instantly, so the challenge will be to market a comeback theme.
"I admit that the Jetsgo brand has blemishes, but its awareness has picked up.
"So, there's a downside and a good side," Mr. Leblanc said.
Jetsgo's fleet of 29 aircraft consists of 15 company-owned Fokkers, parked in Quebec City, and 14 leased Boeing MD-83s -- eight in Toronto and the rest located in Vancouver and Montreal.
A key to rescuing the carrier will be persuading the lessors that it's best to stick with Jetsgo, rather than finding another airline to pick up the MD-83 leases.
Mr. Leblanc, who hopes to persuade creditors and consumers to give him another chance, said he expects that Jetsgo will sell off the 15 Fokkers and liquidate other assets under the supervision of court-appointed monitor RSM Richter Inc. Hours before filing for bankruptcy protection on March 11, Jetsgo supervisors directed the bulk of Fokker pilots to fly the aircraft to Quebec City, under the guise of maintenance checks, for safe haven from creditors.
Toronto law firm Cassels Brock & Blackwell LLP is the lead representative of the aircraft lessors. Eight to 14 MD-83s could form Jetsgo's reduced fleet, sources said.
Under the proposal to breathe new life into Jetsgo, the carrier's lawyers are expected next week to ask the Quebec Superior Court to extend the April 11 deadline for Jetsgo to file a plan of arrangement to reorganize the airline.
The Montreal-based company, controlled by Mr. Leblanc, would then hold discussions with creditors in the hope of filing its restructuring plan by May 15 and have creditors review that proposal in the first week of June, sources said.
The Jetsgo president said no decision has been made yet on whether to change Jetsgo's name and whether the restructured business should be a chartered or commercial carrier.
When the discount airline filed under the Companies' Creditors Arrangement Act nearly three weeks ago, 17,000 passengers were left stranded and more than 1,200 employees lost their jobs.
The Greater Toronto Airports Authority, overseer of Pearson International Airport, would want "stringent financial rules" in place before approving any Jetsgo reorganization plan, GTAA spokeswoman Connie Turner said.
She said Jetsgo decided against declaring bankruptcy, preferring to go the CCAA route to buy itself some time to regroup.
"Frankly, we were quite surprised that they went under CCAA, considering that they shut down and they let their employees go," Ms. Turner said.
"I just think it would be a hard sell for the whole industry just because of the damage to their reputation and leaving a lot of creditors hanging out there."
The GTAA says it's owed $5.5-million by Jetsgo. The largest single creditor is credit card clearing agent Moneris Solutions Corp., which is owed at least $30-million.
Jetsgo would require safety approvals from Transport Canada, but Mr. Leblanc expressed confidence that he could get the green light from Ottawa since Jetsgo already holds certain operating certificates and licences.
A job fair, organized by the Toronto Board of Trade, will be held today for former Jetsgo employees. Mr. Leblanc said his scaled-down airline would need a smaller work force, and there are provisions to recall staff who belonged to the Teamsters Canada union, including flight attendants and ground crew.
One industry source said that while creditors are well aware of Mr. Leblanc's track record of heading or being closely linked with four airlines that didn't survive, the aviation entrepreneur could still win over some jaded creditors by stressing the prospect of redemption.
Jetsgo lost more than $55-million in the eight months prior to its grounding and has $108-million in liabilities, but Mr. Leblanc insists that with a new business model, a turnaround is in the offing.
"If we can craft a plan that makes sense commercially and brings back a business that's profitable, why not? We're looking at our strengths and weaknesses. We have to act responsibly. There's a good management