Canadian Airline Shuts Down, Thousands Stranded
After a troubled week that included two separate engine malfunctions and the start of a federal investigation, Canadian discount airline Jetsgo abruptly quit flying its fleet of 29 jets on Friday and filed for protection from creditors. As many as 17,000 passengers were stranded in the midst of a busy school-vacation travel week. Jetsgo said its business is no longer viable because it is deeply in debt and its airfares are well below cost. The company blamed intense competition from other carriers, especially WestJet, for its financial woes. Clive Beddoe, CEO of WestJet, told reporters he was not surprised to see Jetsgo fail, because Jetsgo owner Michel Leblanc had told him he would undercut every fare WestJet had until he filled his airplanes. "Well, I hate to say that that's not a very good business model that works," Beddoe said. On March 4, an engine failed as a Jetsgo aircraft was taking off from Toronto. A day later, a Jetsgo airplane landed in South Carolina with oil leaking from an engine. Jetsgo has hubs in Montreal and Toronto, and is Canada's third-largest airline, flying to 20 destinations in Canada and 10 in the U.S. It's been flying since 2002 and employs about 1,200 workers.