The launch of another Canadian ultra low-cost carrier has been delayed yet again, as Canada Jetlines announced that two investors have pulled out after the airline failed to secure financing of $40 million.
According to a statement by Canada Jetlines, investors SmartLynx and InHarv ULCC Growth Fund “have exercised their rights to terminate their investment commitments,” as a result of the lack of funding. The statement goes on to say that “the Dec 17, 2019 Launch date will need to be postponed and the Company will not pay additional deposits and will therefore not receive their first two Airbus 320 it has planned to receive in November this year,” adding that “no further date will be announced until funding is secured.”
In order to conserve cash, Canada Jetlines said that it “will lay off most employees except for a core team lead by the Executive Chairman who will continue meeting with investors trying to secure financing,” adding that it “intends to re-hire again employees once proper funding have been secured.” In addition, CEO Mr. Javier Suarez, has tendered his resignation effective immediately. The Company will begin the process to identify a replacement CEO. Director Zygimantas Surintas has also tendered his resignation.
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