Perhaps I'm just being naive, but there's got to be something illegal about the way discount Canadian air carrier Jetsgo just folded up its tent and left thousands of travellers high and dry:
The Montreal-based airline's abrupt suspension of operations left 17,000 angry travellers in limbo across North America during a prime holiday period, and disappointed 1,200 shocked employees from coast to coast.
But it's not as if no one at Jetsgo saw this coming a mile away, is it?
The Greater Toronto Airport Authority, overseer of Pearson International Airport, and air-traffic controller Nav Canada were owed millions of dollars. They had placed stern phone calls this week to Jetsgo, with Nav Canada threatening to seize planes if it was not paid immediately.
The upstart discount carrier's founder, Montreal entrepreneur Michel Leblanc, couldn't deny the growing chorus of demands from creditors any longer...
Court documents filed yesterday in Montreal show the airline has lost $55-million since June 30, including an estimated $10-million last month.
And just what kind of timing was there?
It was two minutes after midnight yesterday when Jetsgo Corp. decided to jump into bankruptcy protection after it failed to fend off payment demands from Canada's biggest airport and the operator of the country's air-traffic control system.
In short, it's not as if any of this could have come as a surprise to Jetsgo executives, which inspires the question: How long had Jetsgo been selling tickets they knew they were never going to honour?
And, under any other circumstances, isn't that called "fraud"?
FURTHER THOUGHTS: I'm sure some legal beagle type is going to explain why this won't work but, the more I think about it, the more I wonder why the federal government, the moment Jetsgo filed for bankruptcy protection, couldn't have stepped in and forced them to continue flying, at least to the point where they had to honour the tickets they had already sold.
As an analogy, those of us who live where it snows know that some cities have a bylaw that requires you to keep your sidewalk clear. If you don't, city workers will come by and do it for you, and the city will send you a bill.
In the same manner, the instant Jetsgo announces that they will stop flying, the feds say, "Uh, I don't think so. We're commandeering your airline, we'll pick up where you left off, keep paying everyone, keep track of the expenses and, when it's done, we'll send you a bill. Or, in your case, we'll move to the front of the line in terms of creditors."
Am I missing something obvious?
2 comments:
You wrote:
Court documents filed yesterday in Montreal show the airline has lost $55-million since June 30, including an estimated $10-million last month.
I wonder why the federal government, the moment Jetsgo filed for bankruptcy protection, couldn't have stepped in and forced them to continue flying
Am I missing something obvious?
I would imagine it has something to do with losing 10 million a month. Who is going to pay that while the planes keep flying? They're bankrupt, remember? Kind of like Social Security, but without the trust fund...if there really is one.
It's just the way normal business works, plain and simple. If you want guarantees, get insurance. I'm sure all of the SLF had reasonable access to travel insurance.
Well, I wasn't suggesting keeping the airline going indefinitely, only long enough to take care of all of the passengers who were in the middle of their trips.
According to the article, there were some 17,000 people left in the lurch (although it's not entirely clear it meant that this many people were actually in the midst of their trips).
Now, say it takes, oh, two weeks to get them all home. That might represent an expense of $5 million but, in the grand scheme of thimgs, $5 million might not be a lot to un-inconvenience 17,000 people. And the government just takes it out of the airline as a creditor.
Travel insurance would normally cover ordinary events -- "act of God" sort of stuff -- but this is a little out of the ordinary.
There are numerous regulations describing how you can and can't do business in Canada. I'm just curious if there are any that can be applied here that say, "No, you can't just choose to fold your operation and leave thousands of people sitting in airports. If you can't deal with it, we will. And you can expect a bill for it."
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