CANJET SUSPENDS FLYING OPERATIONS Looking for new business plan
Posted on 09/02/2015
It’s not a good time for airlines. First SkyGreece ‘temporarily’ suspended its operations (though it’s not their fault, and they are sorry) and now Halifax-based CanJet has suspended its flight operations Tuesday, but they too are not calling it a day – just taking some time to look for a business model they are “comfortable with.”
That's according to company president Stephen Rowe, who said the company isn't shutting down, but is redoubling its efforts to find a profitable business plan. “We just haven't found that business model that we're comfortable with.
“We're going to keep looking. We're not closing. We haven't given up yet.”
In April this year Canjet laid off 67 pilots and 68 flight attendants. Now the remaining 15 pilots and about 40 flight attendants have also been laid off.
The airline, a division of IMP Group Ltd. of Halifax, has been focused on charter flights since ending its scheduled airline service in 2006.
Starting late last year, CanJet had offered its own vacation packages to the Caribbean through CanJet Vacations, and it was offering charter services in Europe last year, but Rowe said those businesses weren't successful.
By May this year, CanJet Vacations essentially closed its doors, while proclaiming that it would be looking to partner with other airlines for the summer programme. Chris Kelly, Canjet's vice president Business Planning said, "We are currently exploring options with other carriers. We are hopeful we will be able to offer a summer programme as planned."
Few in the industry expected that to actually happen, and it didn’t.
The airline continued to operate, but with only one passenger jet under contract for tour operator Air Transat when the decision to suspend operations was made. However, the company is maintaining a total of four Boeing 737 passenger jets through leases that expire in May 2016.
The airline could return to offering scheduled flights, but Rowe said competing with Air Canada and WestJet would be a risky venture.
“We've been there and done that a couple times,” he said. “It's a tough business.”
When the airline stopped its scheduled service in 2006 it blamed tough competition from Air Canada and WestJet.
The Canadian Union of Public Employees issued a statement saying the sudden shutdown was devastating news.
“(We) found out only this morning that CanJet has ceased flying operations immediately,” said union spokeswoman Lesley Swann. “Our focus is on assisting our members any way we can during this difficult time.”
Swann said the union was seeking information about severance pay while examining “legal avenues.”
Dan Adamus, president of the Canadian wing of the Air Line Pilots Association, said CanJet had as many as 130 pilots in recent years.
“It's sad because it's a great operation,” Adamus said in an interview. “The majority (of workers) are from the East Coast and are very loyal to the airline.”
Adamus said the airline has had to shut down operations before as it struggled to attain profitability.
“They've been able to pull rabbits out of hats in the past,” he said.
In April 2014, Air Transat did not renew a contract it had with CanJet since 2009. Under that five-year deal, Air Transat used CanJet aircraft to serve more than 20 Canadian cities and about 20 vacation spots.