Another airline gone bust

[YYZ]

Just been informed Skyservice has gone under, really bad news for all if its true?
Anybody able to confirm?

Best of luck to everybody involved?


YYZ

[tubby linton]

Skyservice cancels most flights from Toronto - The Globe and Mail (http://www.theglobeandmail.com/report-on-business/skyservice-cancels-most-flights-from-toronto/article1518479/)

The Skyservice charter airline has cancelled almost all of its scheduled flights out of Toronto's Pearson International Airport.
A local television news channel says the privately owned company may have gone out of business.
The Canadian Press has been unable to reach a Skyservice representative for comment and a spokeswoman for the Greater Toronto Airport Authority has referred all questions to the company. Messages have been left for the CEO of Skyservice.
According to its website, the airline was founded in 1986. It has more than 1,200 employees and operates more than 20 commercial aircraft to destinations in Canada, the United States, Caribbean, Mexico and Europe. Its fleet includes the Airbus A330, A320 and the Boeing B757.

[30W]

Anybody able to confirm?

Tis confirmed!

Another sad day for aviation - good luck to all involved!

[fantom]

Sad indeed.

If this is correct, may there may be sig after-shocks to the UK charter fleets? (thinking Canadian pilots flying in Europe for our summer and vice versa).

[Mr @ Spotty M]

Fantom, you have hit the nail on the head, Thomson Airways for one now has a big problem and l guess TCX as well.
I wonder how much money is also owed to both airlines from this winters leases.
Sorry to see them go under, my airline supplied a/c to them in the old days.

[fantom]

Indeed. Airworld were the first to experiment with four A320 pilots (questions in the House, no less) but our excellent Chief Pilot won the day to allow foreign pilots in. That mushroomed to the mutually benefitting situation that exists today...until today.

[Guzzler]

Very very sad news.

Sorry to hear this.

[BusBoy]

Very Sad day
Best of luck to everyone there
I enjoyed working with you! Great Times

BB

[timmcat]

Press release here....

Announcement from Skyservice Airlines

TORONTO, March 31 /CNW/ - Skyservice Airlines today announced the shutdown of its operations following the appointment of a receiver by the Ontario Superior Court of Justice.

Recent changes in the Canadian vacation tour market combined with Skyservice Airlines' debt level have rendered the company unable to maintain profitable operations. As a result, one of the company's secured lenders applied for the appointment of the receiver.

The shutdown results in the cancellation of one flight that was scheduled to depart Canada for the Dominican Republic today and its return leg, as well as all remaining flights scheduled to depart Canada during the balance of the season in April. The company has requested, and the receiver has agreed, to work with the company's tour operator customers and other lift providers to ensure that passenger issues are resolved promptly.

Skyservice Airlines and the receiver are committed to winding up the business in an orderly and responsible manner. The company and the receiver will continue to treat employees and other stakeholders fairly and in a transparent manner throughout this process.

Note to editors: for a link to FTI (the trustee) as well as guidance and links for passengers to contact the tour operator and travel agents, please see: Charter, Maintenance, Engineering and Airline Services for Commercial Operators (http://www.skyservice.com)

For further information: Bryan Mills Iradesso Corp., Allan McN. Austin, Tel: (416) 447-4740 x240, [email protected]

[Ermore]

And how many of those pilots will get on with another charter outfit that will just close its doors in less than a year.

Tough business.

[Jonty]

Rumor has it it was a subsiduary of Thomas Cook Group that put them under. So if that is the case one would like to think that TCX has a plan.

Doesn't help those on the reciving end. Sad news, and I hope those affected find jobs soon.

[tiggerpurrrz]

Very Sad to hear about Skyservice..goodluck to all affected and hopefully find jobs soon.

[dublindispatch]

I know for the past 5 maybe more years in Dublin we had CGTBB over doing work for as was air2000 and now Thompson Airways and that this Summer both Dublin and Belfast where to get a SSV A320 one based in each station.

Me thinks at this late stage so close to the season kicking off, 01MAY, a big pile off pooh for all parties I would think as im sure TOM does not have the capacity in its fleet to cover!!

[J.O.]

TOM may be able to use some resources from Sunwing with a couple of NGs to cover DUB and BFS. I was due to be in DUB in August and I am sad that I won't get the chance to do that now.

[Downwind_Left]

Sad news for all concerned, especially as an ex-AMM/FCA employee who dealt with Skyservice and some of their staff as far back as the first leases between the airlines in 2003.

Unfortunate that just as things seem like they may be starting to turn a corner, there is another unlpeasant shock like this one.

Best wishes to all former Skyservice staff...

As for Thomson's problems, I'd think it's more of a crewing problem than one of aircraft availability. I'm not sure who the primary lessee on these aircraft is now - but they are all basically Thomson (former First Choice) aircraft that have spent most of their winters in Canada and summers in the UK recently on long term contracts with Skyservice, they are normally C-registered year-round because of difficulties getting Canadian crews licensed to operate G- aircraft. FCA cabin crews were always used in the UK/Eire, and FCA pilots were posted to Canada to operate the aircraft on the C- register in winter as required.

[blue up]

Quite ironic that I saw one of the TOM 737 captains handing in his uniform due to the TOM 'downsizing' yesterday lunchtime, on the very day that he might be needed.

[myairways]

It is very sad news. Excellent Flight deck and cabin crew, Worked with them for a few years. I wish you all the best of luck.

[Fly4Fun]

Best of luck to all of you!

[Edgar Jessop]

How to make a small fortune in the airline business..... start with a large one :(

Sad to see another one bite the dust, and a bit surprising too, as this is usually the time of year the airlines dust off the winter blues with advance payments for the summer flights keeping them going until the next winter hibernation.

[WHBM]

Sad to see another one bite the dust, and a bit surprising too, as this is usually the time of year the airlines dust off the winter blues with advance payments for the summer flights keeping them going until the next winter hibernation.
Bear in mind that the seasonality of the Canadian market is opposite to that in much of Europe, peak is in the winter, with high demand for flights away from the snow down to the Caribbean etc. In the summer Canadians tend to drive up to the lake for vacation time and there is less charter demand. For this reason there has long been a tradition of aircraft spending the winter in Canada and the summer with UK operators.

Rumor has it it was a subsidiary of Thomas Cook Group that put them underDon't know about that, but it is normally not paying your bills that puts companies under. Thomas Cook has had aircraft on winter lease to Skyservice which have just been returned. If the lease payments had not been made for these, that's probably the reason.

[J.O.]

It's pretty complicated but it is true that TCX put Skyservice into receivership (our version of administration). This comes from the filings with the bankruptcy court.

[bmibaby319]

Sad Day, This is were most of the UK Charter/Holiday Airlines Aircraft spent there time in the winter. But also, I heard they were going to pack in the company after troubule with Crediters, but oviousaly not.

[STN Ramp Rat]

It's pretty complicated but it is true that TCX put Skyservice into receivership (our version of administration).

http://cfcanada.fticonsulting.com/skyservice/docs/Pre-Appointment%20Report.pdf gives the details.

It would appear from this court document that

1) SSV were doomed from the moment that TUI acquired Sunwing and decided to transfer the flying to SWG. (Point 16 in the report)

2) Thomas Cook Canada Inc (TCCI) took over the SSV some of the SSV debts in Feb 2010. It is not stated how much they paid for the debt. It is a guess on my part but I suspect they were propping up SSV until the end of the peak winter flying program to avoid disruption to the TCCI flying program (point 15 and point 27 in the report)

3) TCCI acted when the 94% owners, Gibralt (a Private equity company) issued a demand for payment on their secured debt and received CAD8.8 Million from SSV. TCCI then issued a demand for payment on their secured debt and received nothing. (Point 18 and 19 in the report)

4) TCCI knew they were going to pull the plug, TUI did not (point 23 on the report)

5) TCCI has the SSV headquarters and the SSV hangers at YYZ as security for their debt. (Point 28b on the report)

It would be interesting to have been a fly on the wall during the discussions around my point 3) did TCCI know that Gibralt was going to run away with CAD 8.8 Million or was this agreed in advance.

TCCI are left with a secured debt on the SSV headquarters and hangers at YYZ.

TCCI have a need to find a provider of lift for the peak W2010/11 season.
SWG are owned by TUI, TSC are owned by Transat, there are no other serious players in the Canadian charter market

My guess would be that TCCI will use the summer to form a new Canadian charter company.

[J.O.]

STN Ramp Rat;

You have summed it up very well. While the TUI Sunwing deal was the death blow, Gibralt's highly leveraged purchase of SSV in 2007 put the patient on permanent life support (a corporate raid worthy of Carl Icahn, IMHO). It made the business unsustainable in any sort of economic downturn or difficulty with a primary customer. TUIs troubles, i.e their $40 + million CDN loss in FY 2008 left them no choice but to make their move on Sunwing in an effort to curb their losses. As we now know from the court documents, that deal set the final wheels in motion. It would have ended sooner had TCCI not agreed to assume the debt from Roynat Capital.

To your question regarding point # 3, the court documents mention that Gibralt's secured debt took precedence over that taken by TCCI. They probably had to agree to that to save the winter season. They also had to agree to keep SSV's financial difficulties in strict confidence. Their numbers aren't in yet, but it sounds like this turned a small winter loss for them into a significant one. The documents show that they are owed just north of $12 million CDN.

No one in the charter market made money in Canada this winter, but TCCI may end up with the smallest loss when all is said and done. As to their plans for next winter, they need someone to fly their lift. They have brought in a mix of A320s and 757s for several years now and I don't think they can change that very quickly. No charter operator here currently operates both types. They will probably want to take a similar stake in their lift provider like TUI has done (49%). How that will eventually play out is the big question.

[STN Ramp Rat]

sorry

I forgot to mention Canjet, they may be able to provide TCCI with the lift. and maybe as J.O. sugests they will buy a stake in them. one issue with this though is that Canjet are Boeing and TCCI are Airbus.

[clunckdriver]

Very in depth look at the situation!however the real problem is that Canadians belive its their God given right to fly to Cuba , stay drunk for a week and fly back, all for $400, the charter outfits to fulfill these expectations are all engaged in a "race to the bottom" to make it happen. If my math is right this is the number twelve to go down the tube in ten years! Thear are other players in this mess now, US outfits picking up Canadian pax at airports just South of the border, I was clearing customs last winter at one of these places, the runways were quite contaminated with the white stuff and I noted that the aircraft picking up the Canadian pax did not have the "M Chine" nose tires as required in such conditions, {this to prevent crud being projected into the engines} I mentioned this to the crew, only to be told they had never heard of such a requirment, so we dug into the books and there it was in bold red print under "limitations!" You get what you pay for folks!

[J.O.]

One further thing - Skyservice's annual revenues were in the range of $700 million CDN. When Gibralt called in their debt on March 30th, it was for approx $8 million. That's chump change in the airline business. Somebody wanted to kill it. :hmm:

[LIMA OR ALPHA JUNK]

Saskatoon, what a load of tripe. Monarch are not TCXs main competitor, TUI are. TCX subs work out to Monarch and has done for years as it suits their business model. As for Paddy Power conspiracy theory, I'm speechless. Thomas Cook were actually quoted at a shorter price than TUI as I recall to go bust.

Thomas Cook made over £400m last year so one of their worst years ever ? I don't think so somehow.

If you want the correct version of what has happened to SkyService google it and read up before posting such uninformed nonsense. It seems TCX wanted it to survive and even bought up its debts to try to help it.

I despair sometimes at what cr*p gets written on here. TCX will go to Transat now I would imagine.

[J.O.]

TCX and Transat - I highly doubt that unless they were to purchase some or all of the Transat tour group.

[steveperrywood]

Hope Saskatoon knows a good libel lawyer

[gatbusdriver]

Care to post any links? I personally think you are posting a load of s###e, but will quite happily be proven wrong.

Regards

GTB

p.s.good luck to the great crew I have had the good fortune of working with at skyservice

[gatbusdriver]

Saskatoon

I have googled for all my worth, I cannot find anything that supports the rubbish that you spout.

I believe we have a conspiracy theorist in our midst.

I do believe that TCX propped up the debt in Feb (approx 9mil), as it suited them at the time. Once the end of the season was upon us I believe they called it in.

The most sensible post about this sad state of affairs is from STN Ramp Rat.

[N707ZS]

Has the exec/medivac side of the buisness also been closed down?

[LIMA OR ALPHA JUNK]

I see Saskatoon that you have now put the knife to your post this morning and changed what you wrote.

Here's Thomas Cooks accounts to pick you up on one of the points you made.

Thomas Cook Group plc - Annual Report & Accounts 2009 - Directors’ Report - Business Review - Financial review (http://www.thomascookgroup.com/ara2009/business_review/finance_review.html)

And to accuse TCX of being involved of trying to bring Monarch down by using Paddy Power bookmakers is complete and utter nonsense.

Try this

Skyservice unexpectedly folds its wings (http://www.vancouversun.com/business/fp/Skyservice+unexpectedly+folds+wings/2752255/story.html)

[LIMA OR ALPHA JUNK]

I too thought the market was very distasteful but the inference you draw by implying that because someone is on the board of Paddy Power and TCX, that he is somehow trying to engineer the collapse of another airline using a bookmaker is quite wrong.

I seem to recall BA was trading at as low as around 6-1, was he trying to bring them down too ? Conspiracy theory bulls**t.

[LIMA OR ALPHA JUNK]

Well I remember BA trading at one point at 6-1, and TCX at a lower price than TUI. I actually wonder what input a board director has into the day to day operation of betting markets. Not much I would imagine. I think your imagination is running a little too wild ;)

As for SkyService, I don't think TCX wanted them to go under. They had a mutually beneficial and reciprical arrangement for crews and aircraft that had been in place for years. On top of 28 SkyService pilots who were contracted to fly G reg a/c for TCX this summer, the company had also made provision for 2 additional C reg aircraft to fly out of GLA and LGW with SkyService pilots to fly lines of work for TCX much to the irritation of BALPA (flagging out). The evidence I hope stacks up for you that TCX is not the airline version of THE TERMINATOR you wish to portray it as :ok:

[Rollingthunder]

Evolution in the air: Skyservice falls prey to shift in travel business - The Globe and Mail (http://www.theglobeandmail.com/report-on-business/evolution-in-the-air-skyservice-falls-prey-to-shift-in-travel-business/article1519276/)

[stansdead]

Saskatoon,

BA were in fact "trading" in single figures in the market mentioned. I saw BA at 8/1.

As for Non Executive Directors of Bookmakers knowing EXACTLY which betting markets their trading ops are involved in on a daily basis.... not realistic I'm afraid.

Your point may well be valid that a Non Exec Director should guide a business towards best practice and corporate governance. However, it's most unlikely that he/she would be involved in any day to day running of the actual bookmaking operation.

As Lima/Alpha says, TCX is far from a terminator. More like a toothless Sheep in my experience.:)

Anyway, everyone knows the betting market was hot air and hype. Hardly any money changed hands.

[windytoo]

Stansdead exactly right, very little money did change hands. For the amazing outlay of £20 one could alter the odds from 10 to 1, to 4 to 1. I know because I did it. This showed the stupidity of the whole betting scandal that was associated with this scheme. Many thousands of peoples jobs were threatened by such a schoolboy prank. Several airlines suffered, a couple are no longer trading. Quod erat demonstrandum. There are said to be two culprits involved, one of whom is the person mentioned by Saskatoon. Whether he personally started it, I am fairly sure he didn't, but he certainly did nothing to stop it getting out of hand, so you can draw your own conclusions. Just shouting about "bags of manure" however, adds nothing to any reasonable argument.

[javelin]

Anyhow.............. Back on thread



Jazz Air links with Thomas Cook, Sunquest

CBC News

Jazz Air LP will operate flights to the Caribbean, Mexico and Central America on behalf of Sunquest Vacations under a new partnership with Thomas Cook Canada Inc., the companies announced Monday.

Sunquest Vacations is Thomas Cook's tour operator.

Jazz will begin serving those destinations on Nov. 1, 2010, in time for the busy winter travel season. As of next January, it will operate a fleet of up to 11 B757 jets from airports across Canada under the name Thomas Cook Airlines.

"Through the combined operational and financial strength of Thomas Cook and Jazz, we will offer Sunquest customers innovative and dependable vacation packages," Michael Friisdahl, CEO of Thomas Cook North America, said in a release.

The announcement comes less than a week after charter airline Skyservice filed for receivership. Sunquest Vacations had used the carrier for many of its destinations.

Jazz currently flies to over 80 destinations in North America on behalf of Air Canada. Thomas Cook operates 93 aircraft around the world.

The agreement is conditional on Jazz Air receiving the required regulatory approvals.

Read more: CBC News - Consumer Life - Jazz Air links with Thomas Cook, Sunquest (http://www.cbc.ca/consumer/story/2010/04/05/jazz-thomascook-partnership.html#ixzz0kFJwQ1C2)

[CPierre]

Thomas Cook negotiating flight service agreement for November 2010 and beyond.

JAZZ AIR INCOME FUND | Jazz Air LP announces flight services agreement with Thomas Cook Canada to operate Boeing 757-200 aircraft (http://www.newswire.ca/en/releases/archive/April2010/05/c7704.html)

I see a whole new thread starting soon.

Best wishes for all at SSV

[ywg396]

The agreement between TCCI and JAZZ was not negotiated in the span of a week.

Does anyone know when the contract between TCCI and SSV was scheduled to expire? Was there an early termination penalty if TCCI wanted to exit early? Was it more that 9 miliion?

Rumour is that Jazz and TCCI have been in discussions since late last year and Jazz ALPA became involved in early spring.

Sounds somewhat predatory to me... Jazz's pay rate for the flight crew may open some eyes.

[J.O.]

Does anyone know when the contract between TCCI and SSV was scheduled to expire? Was there an early termination penalty if TCCI wanted to exit early? Was it more that 9 miliion?

It expired on May 1, 2011. There was a termination penalty but I don't know how much it was for.

Rumour is that Jazz and TCCI have been in discussions since late last year and Jazz ALPA became involved in early spring.

I think you can count on that.

Sounds somewhat predatory to me... Jazz's pay rate for the flight crew may open some eyes.

:hmm:

[Torque2]

I think that the fact that TCX took the hangar and offices as surety against debt indicates that the writing was on the wall and no predatory intent. It also allowed them to get their aircraft back at the end of the season which may not have been assured otherwise (aircraft currently impounded at YWG and YYZ).

Whilst it is understandable that Jazz pilots are very pleased to have picked up the contract nothing is assured yet until the regulatory approval has been granted and then serious talks take place regarding the crewing of aircraft. That might need more flexibility and consideration on the Jazz pilots part than they currently display over on Avcanada although who knows what the details will be yet.

I sincerely hope all SSV personnel secure employment soon.