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Jetsgo plans switch into charter carrier

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Jetsgo plans switch into charter carrier

By BRENT JANG AND SINCLAIR STEWART

Monday, April 11, 2005 Updated at 9:44 PM EST

From Tuesday's Globe and Mail

Jetsgo Corp. founder Michel Leblanc plans to switch into the charter airline business, using eight leased aircraft in a slimmed-down operation that could include targeting sun destinations.

The proposed conversion to charter service means that Montreal-based Jetsgo would deal with tour operators rather than directly with consumers. When Jetsgo grounded its 29 planes and filed for bankruptcy protection on March 11, it stranded 17,000 passengers.

Mr. Leblanc unveiled a preliminary “corrective action plan” Monday as the scheduled carrier sought safety clearances from Transport Canada.

He said he notified Transport Canada of his restructuring proposal for eight leased MD-83s, with provisions for increasing the fleet to 14 aircraft. Transport Canada, which was examining Jetsgo's newly updated training manuals late Monday, is to announce its decision today on whether to let the airline keep its air operator certificate.

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One industry source said Jetsgo's options include using Atlantic Canada as a key hub, perhaps targeting flights to places such as Florida, Mexico and the Caribbean.

Mr. Leblanc said he has appointed Marc Kirner as Jetsgo's director of flight operations. Mr. Kirner, currently Jetsgo's chief operation officer and a former executive at Bangkok Airways, replaces Ronald Henry, “who is leaving to pursue other opportunities,” Mr. Leblanc said.

Privately owned Jetsgo, controlled by Mr. Leblanc, is under court protection from creditors until May 13. Last Friday, the carrier obtained a one-month extension for bankruptcy protection, originally slated to expire Monday.

Jetsgo plans to sell its 15 company-owned Fokker 100s, leaving it with 14 leased Boeing MD-83s. Of those MD-83s, Jetsgo wants to immediately renegotiate with lessors to retain eight of the planes to allow it to stage a summer revival.

One of the Fokkers is earmarked for sale to Ford Air Services LLC and five others could be sold soon.

Some creditors say they're willing to examine insolvent Jetsgo's plan of arrangement, which must be filed by May 13.

Kevin Tait, a spokesman for Moneris Solutions Corp., said the credit card clearing agent has not made any decisions on whether it will work with Mr. Leblanc in his efforts to build a charter airline, or on any other venture for that matter.

Mr. Tait said the company will review any of Mr. Leblanc's business proposals in much the same way it would look at any other opportunity, although he acknowledged the executive's track record in the industry would be a consideration for Moneris. The card processing company has not yet reviewed plans for the new charter airline, he said.

“Him alone is one thing. Him with solid financial backing and certain guarantees in place and other things that could be negotiated — who knows where that might lead us?” Mr. Tait said. “But I would hesitate to say we would never do business again, simply because the scenario could change a fair amount....”

Moneris is owed $45-million by Jetsgo, making it the airline's single largest creditor. As the carrier's credit card processor, it also has serious leverage: Withholding credit card support could deal a severe blow to Mr. Leblanc's effort to relaunch the airline.

Jetsgo creditors will be in the Quebec Superior Court today in Montreal to press their claims against the airline, the first of three days scheduled to hear motions from creditors.

The Travel Industry Council of Ontario, representing travel agents in the province, said Monday that it opposes efforts by Jetsgo to return to the skies.

Council president Michael Pepper said there are inadequate financial safeguards to prevent a recurrence of consumers being stranded by cancelled Jetsgo flights.

Jetsgo submitted updates to its training manuals and procedures Monday morning, as requested by Transport Canada. A four-member special inspection team at Transport Canada analyzed Jetsgo's safety policies and procedures Feb. 14-23, sparked by a botched Jetsgo landing Jan. 20 at Calgary International Airport.

In February, amid concerns about “deficient” manuals on “vertical separation” of aircraft, Transport Canada forced Jetsgo to fly at lower altitudes, where planes use more jet fuel.

On March 8, Transport Canada issued a one-month safety warning to the airline, giving it until Monday to comply. Last week, the Attorney-General of Canada filed a 75-page document in the Quebec Superior Court on behalf of 10 government department and agencies, outlining a litany of concerns over federal standards for safety, labour and other issues at Jetsgo.

In that court filing, the inspection team's nine-page summary report said Transport Canada had “concerns regarding Jetsgo's rapid growth,” cautioning that the carrier was being stretched too thin.

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Guest YWG Flyer

Not too sure if this arouses any interest or not, but three MD-83s were positioned Vancouver-Mirabel today as JGO600/601/602. All flying FL270.

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One has to wonder how long it might be before he starts expanding and looking at regular service in Canada again. The charter stuff is probably just a ploy to get himself back in the business.

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With his track record, who will deal with him? He has screwed too many people over the years. I am sure the tour operators remember.

B

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Yes, but they were very unhappy with the service they received from SG Mk.1, particularly when many of their customers were left high and dry at March Break time. I guess time will tell if it hurt badly enough for them to walk away from any future business with ML.

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What's French for chutzpah?

"In return for taking part in a new business plan for his company, Leblanc is insisting on a "directors and officers charge" of $5 million to protect him against suits."

Jetsgo founder Michel Leblanc is vital to its restructuring, court told

April 12, 2005 - 16:49

By KARINE FORTIN

MONTREAL (CP) - Jetsgo founder Michel Leblanc is vital to any restructuring of the airline, a bankruptcy court hearing was told Tuesday.

Gilles Robillard, a specialist with the court-appointed monitor RSM Richter, said the shutdown of Jetsgo last month tarnished the reputation of Leblanc, who founded the discount airline in 2002. However, Leblanc's collaboration remains absolutely indispensable to any project to relaunch the airline in some form, Robillard said, adding that creditors would probably be better off with that situation.

Robillard said a restructuring or an orderly sale of assets with the help of Leblanc would bring in between seven and 11 per cent more than if the airline was allowed to go bankrupt.

The difference comes from the expertise of the airline's chief executive and his close managers and their numerous contacts in the aviation industry.

"These are aviation experts who are capable of solving problems without having to resort to third parties," Robillard explained.

He said Leblanc would be better positioned than anyone to convince the three aircraft leasing companies that rented MD-83 aircraft to trust him again. An agreement with the aircraft lessors would allow Jetsgo to start to generate revenues again, as well as reduce its debt.

The presence of the Leblanc would also make it possible to continue and even win a lawsuit Jetsgo has executed against Calgary-based WestJet, its CEO Clive Beddoe and a WestJet former executive that Jetsgo has accused of industrial espionage, Robillard said.

The case could go on for years, but they could end up with a solid gain for Jetsgo, which is claiming more than $50 million, he said.

In return for taking part in a new business plan for his company, Leblanc is insisting on a "directors and officers charge" of $5 million to protect him against suits.

Most of the creditors, including Nav Canada, the country's major airports and the credit card transaction company Moneris, are opposed to this condition which they qualify as "useless."

The creditors say Leblanc is already covered by an insurance policy for $10 million.

Nav Canada lawyer Denis Saint-Onge said in any case, Jetsgo's chances of taking off again are pie in the sky.

Justice Francois Rolland of Quebec Superior Court will have to rule on the question of a charge for Leblanc, as well as on requests from other groups on changes to the bankruptcy order, which is in effect until May 13.

In documents filed with Transport Canada, Leblanc says he wants to resume flying this summer with an eight-aircraft charter operation.

Jetsgo had 29 aircraft when it suddenly shut down March 11.

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"These are aviation experts who are capable of solving problems without having to resort to third parties," Robillard explained

Hey Leblanc......you screwed your employees and you screwed the travelling public.... 3 times over ! Nobody likes or trusts you now go away and dont come back.

And if your that hard up for something to do i heard the federal liberals are conducting a job fair for politicians, I think your resume would be a winner but they require a $2 million training bond. tongue.gif

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the shutdown of Jetsgo last month tarnished the reputation of Leblanc

No kidding!

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Guest rattler

I remember last winter that Westjet picked up a fair amount of coin from operating charters on behalf of various charter companies. Have to guess if Jetsgo does rise from the ashes as a provider of aircraft to charter companies, Westjetand others will either have a revenue loss or there will be a bidding war in the charter aircraft provider market.

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I remember last winter that Westjet picked up a fair amount of coin from operating charters on behalf of various charter companies.  Have to guess if Jetsgo does rise from the ashes as a provider of aircraft to charter companies, Westjetand others  will either have a revenue loss or there will be a bidding war in the charter aircraft provider market.

If you were a tour operator, would you make any kind of a commercial arrangement with Jetsgo? How many people were stranded the last time? I know WJ has done some "rescue" charters out of Quebec city for some tour companies who were left in the lurch once.

I'd guess that most, if not all, tour companies have had dealings with, or know of, Leblanc-cheque.

His goose is cooked.

edit for spelling!

Edited by flybye

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If you were a tour operator, would you make any kind of a commercial arrangement with Jetsgo?

Human nature, being what it is, insures that some will choose the low bidder even when there's a possibility of getting burned. If he manages to convince the creditors (a long shot) to allow a re-start I guarantee he'll find work for the aircraft and pilots to fly them.

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I think you'll see Westjet tighten up its partnership with Transat and drop the "other" charter companies.

Well CanadaEH, I wouldn't consumate the marriage just yet...we start some flying for them next month.

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Not for this season as it officially ends 15May. All of our Caribbean flying this past winter (POP, PUJ, HOG, VRA & CUN) was for SunQuest. That will be "expanded" next season as well as some flying for AT. We have been approached by another company but realistically, we'll be maxed based on our fleet size and domestic committments.

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Hey Ceesix, how were the loads on your Sunquest flights, and which destination destinations did you serve? Our loads on the Conquest flights this winter were pretty good out of YHZ.

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Well CanadaEH, I wouldn't consumate the marriage just yet...we start some flying for them next month.

From the rumors we're hearing ceesix, that's not the only marriage that could be consumated.... rolleyes.gif

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Now, now Spinnaker...we'd like to maybe smooch first, you know - dinner and drinks, before we get f'd(you know what)! What have you heard that the rest of us haven't..c'mon kiss and tell! wink.gif

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If CanJet wants to be Transat's favourite wife then who are we to argue? tongue.gif

I didn't realise AT was based in Utah... biggrin.gif

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Now, now Spinnaker...we'd like to maybe smooch first, you know - dinner and drinks, before we get f'd(you know what)!  What have you heard that the rest of us haven't..c'mon kiss and tell! wink.gif

LOL...that's funny,

It would be a worse marriage than AC/CAI... you'd be those 'Down Easters' and we'd be the 'Cult-ure' who think we're better. Can't we just see it all now?

I'd be the 'near upgrade FO' you'd be that Captain who 'stole' my spot. We call Keller and Mitchnick, you guys throw them a wine party...we get fences on the 700 but I never see my career advance for years. All the while you're wearing a uniform you hate and longing for the old days of zipping around in the old CanJet paint job with the 'original' people of the Halifax base. We then could even buy up Provincial, Pacific Coastal, CMA, Perimeter and Bearskin... write up a scope, get a union, start a fight over RJ's and stop talking to our managment... the rest is history.

All kidding aside now... the only thing I actually know is Ken Rowe has been shopping CanJet on a regular basis and Clive Beddoe has been saying "We're no longer ruling that out". That's all I've really heard... hope for the best, I'd rather be having dinner and drinks with you as the situation is now. biggrin.gif

Edited by Spinnaker

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[...] Can't we just see it all now?

I'd be the 'near upgrade FO' you'd be that Captain who 'stole' my spot. We call Keller and Mitchnick, you guys throw them a wine party...we get fences on the 700 but I never see my career advance for years. All the while you're wearing a uniform you hate and longing for the old days of zipping around in the old CanJet paint job with the 'original' people of the Halifax base. We then could even buy up Provincial, Pacific Coastal, CMA, Perimeter and Bearskin... write up a scope, get a union, start a fight over RJ's and stop talking to our managment... the rest is history. [...]

laugh.gif

Naw, that couldn't ever happen. ...sounds way too crazy... unsure.gif

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It's all comin' clear now... mad.gif ..there was a coupon for a free jar of Vaseline attached to my last pay stub. Gettin so it doesn't hurt anymore.

Except for the rumor I'm just kiiding about the rest. At least you Maritimers are known for your sense of humor.... right? laugh.gif

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