Deadline Loom for Jetsgo

[Kip Powick]

Jetsgo faces safety ultimatum

The federal government wants to clamp down on insolvent Jetsgo Corp., arguing in a 75-page court filing that Canada's aerospace reputation could be tarnished if alleged safety infractions at the discount airline are allowed to go unchecked.

The Attorney-General of Canada, representing 10 government departments and agencies, is asking Quebec Superior Court to modify its initial order that granted Jetsgo protection from creditors on March 11. Ottawa argues that Jetsgo's bankruptcy protection has unduly restricted the ability of regulators to perform their duties.

“This situation is contrary to public interest and the security of users, and also considerably damages Canada's reputation at the international level with respect to aeronautical security and safety,” the government warns in its submission. “An inspection by representatives of Transport Canada had revealed important deficiencies in numerous areas of Jetsgo's operations.”

The Attorney-General said the initial court order effectively prevents regulators from enforcing aviation rules. Last fall, Transport Canada grew nervous about Jetsgo being stretched too thin, and the concerns intensified through the winter, the new court filing shows.

Ottawa said that unless Jetsgo complies with safety rules and updates training manuals by noon Monday, it will suspend the company's air operator certificate.

Jetsgo founder Michel Leblanc, who controls the privately owned airline, said in an interview yesterday that he remains committed to his plan to revive the Montreal-based carrier this summer.

He said Jetsgo will ask Chief Justice François Rolland today in Quebec Superior Court to extend bankruptcy protection — scheduled to end Monday — until May 31.

Jetsgo has kept in contact with federal regulators since March 11, and Ottawa's safety concerns over rapid expansion need not be exaggerated because the revamped airline would be much smaller, Mr. Leblanc said.

Jetsgo, formed in mid-2002 with just three aircraft, grew swiftly into a fleet of 15 company-owned Fokker 100s (F100s) and 14 leased Boeing MD-83s. “There's no way that our upcoming business plan will have 29 planes,” Mr. Leblanc said of his vision for a scaled-down fleet of perhaps eight leased MD-83s.

The Jetsgo president said he understands Ottawa's get-tough safety position, and he will be working hard to meet the noon Monday deadline to address concerns, notably revising manuals that became outdated as the discount carrier expanded.

Court-appointed monitor RSM Richter Inc. released its second report late yesterday, saying Jetsgo aims to file its restructuring plan by May 13, and the sale of the Fokkers is going smoothly, with six of the aircraft expected to fetch a total of $16.5-million.

Ottawa's court filing includes previously confidential correspondence such as Transport Canada's stern warning letter, dated March 8, to Mr. Leblanc.

“The rapid growth of Jetsgo has created deficiencies in the organizational structure and operational support services,” wrote Captain Denis Guindon, chief of the airline inspection division under Transport Minister Jean Lapierre. “Upon review, the Minister of Transport has determined that further action is warranted.”

Ottawa's filing also reveals that Transport Canada conducted a special inspection Feb. 14-23 on Jetsgo, sparked by a botched Jetsgo landing Jan. 20 at Calgary International Airport.

The four-member Transport Canada team, led by Toronto-based air carrier inspector Brian Campbell, detailed their concerns in a nine-page summary.

“The accelerated introduction of the F100s placed a significant strain on company resources,” according to the summary filed in court.

It added that staffing levels at Jetsgo, which employed more than 1,200 workers, were “inadequate during irregular operations” such as a winter storm.

For instance, “dispatchers were preoccupied and/or distracted by the requirement to assess a changing schedule, answering continuous phone calls, preparing and amending flight plans,” said the summary. It also cited examples of “observed deficiencies” in manuals, including instructions for emergency response, handling dangerous goods, weighing baggage and training for severe ice conditions.

Jetsgo racked up at least $108-million in liabilities. While Canadian airport authorities have been unsuccessful so far in recouping airport improvement fees, “the authorities still have the opportunity, if they so desire, to make their case on their merits,” said Gerry Apostolatos, who is a senior partner at Langlois Kronstrom Desjardins, which represents eight airport authorities.

Mr. Justice Rolland has allowed credit card clearing agent Moneris Solutions Corp., Jetsgo's largest creditor that's owed $45-million, to “issue and serve a bankruptcy application” in future to preserve certain rights prior to April 5.

Ottawa's court documents also include an affidavit from John McKennirey, assistant deputy minister of Ottawa's Labour Program, who wrote that Jetsgo pilots suffered a “double blow” because the pilots lost their jobs and also watched their training deposits of up to $30,000 each potentially vanish with the grounding of the airline.

[conehead]

Jetsgo faces safety ultimatum

Ottawa said that unless Jetsgo complies with safety rules and updates training manuals by noon Monday, it will suspend the company's air operator certificate.

“The rapid growth of Jetsgo has created deficiencies in the organizational structure and operational support services,” wrote Captain Denis Guindon, chief of the airline inspection division under Transport Minister Jean Lapierre. “Upon review, the Minister of Transport has determined that further action is warranted.”

I will be very, very surprised if this airline is allowed to re-commence operations.

[CAT3DUAL]

It seems to me that Ottawa has had enough of "Mike the White" and his string of aviation disasters, that they are prepared to do what ever it takes to keep him on the ground.

If this is not a clear message to any potential investors , (if there were any) to stay away from this turkey, then i don't know what more you can do.

[B75/76]

Absolutely! Let's hope this was the last we see of ML.

[Guest prob30]

He just has to keen up the charade long enough to buy a bit more WJ and AC stock. Then once the final nail is hammered, cash out with a few more percentage points.