Jetsgo Suddenly Went Bankrupt!

[xboxrulz 0]

This is in the front page today in Toronto Star:

 

 

Spring-break shock

Cheap fares and no-frills service marked the brief history of Jetsgo Corp., which went out of business yesterday

 

NICOLAAS VAN RIJN

STAFF REPORTER

 

As thousands of Ontarians were making final preparations for an eagerly anticipated end-of-winter spring break, Jetsgo president Michel Leblanc was putting the final touches on some preparations of his own.

 

And at 12:30 a.m. yesterday, just hours before those thousands of sun-starved travellers were to set off for the airport, Leblanc's carefully prepared bombshell blew up their plans.

 

Jetsgo was grounded. Out of business. And its planes weren't going anywhere.

 

"We are very concerned about our customers and the significant hardship that this action causes," Leblanc said in his statement pulling the plug on the 2 1/2-year-old airline.

 

But he offered no relief and no advice to his thousands of stranded passengers. And there were no refunds, no alternative travel arrangements.

 

"We encourage our passengers to contact their travel agent or an alternative airline," Leblanc's statement recommended.

 

Immediately after the announcement, Jetsgo's counters at Pearson International Airport were stripped of signs and passengers arriving for their early-morning flights found little assistance and fewer answers.

 

Instead of paying a little and flying a lot, as the airline's motto promises, Jetsgo passengers were left with little alternative and paying a lot to make other arrangements.

 

But not all will be totally out of pocket. Anyone who booked directly with Jetsgo may be out of luck, but if they paid by credit card there's a chance the card company will absorb the cost. Those who booked through an Ontario travel agent should contact their agent for reimbursement through the Travel Industry Council of Ontario, the industry compensation fund.

 

Robert Kofman, an official with bankruptcy trustee RSM Richter, said Jetsgo would refund ticket purchases made by customers 24 hours before Jetsgo's court filing and several credit card issuers said they would refund any other unredeemed tickets.

 

It wasn't only passengers who were bowled over by the news.

 

Jetsgo baggage loader Mario De Zilwa was just one of the airline's 1,350 employees who immediately lost their jobs. The Brampton resident discovered he had no job when he got to work at Pearson early yesterday.

 

"It keeps happening over and over ? guys coming in and opening airlines, running them for a couple of years and then they just close it down, screw the public up, screw the employees up," he said.

 

"I have bills to pay," De Zilwa, 39, said. "What am I going to do?"

 

The move, announced in the dead of night, stranded some 17,000 passengers, cancelled about 70 flights ? 18 of them scheduled to leave Pearson airport before noon yesterday ? and destroyed those holiday plans for many.

 

Vacations, weddings, family reunions and scores of other family and business functions were affected by Jetsgo's decision to stop flying.

 

Craig and Terry Baumgartner were among those hit hard by Jetsgo's failure. The Oshawa couple paid $750 to fly Jetsgo to Charlottetown for a curling bonspiel. But when Air Canada offered seats, first at $4,000, then at $1,692 ? one way, and a day later ? they decided to head back home.

 

Vicki Sanderson had to call her 84-year-old mother in St. Petersburg, Fla., and stop her from going out to buy "kid-friendly" groceries for the grandkids. Sanderson and her family were stuck in Toronto, and she was "mad as hell," especially after being unable to contact Jetsgo by phone or Internet about her family's tickets, for which she'd paid $2,700.

 

Others, too, were crushed by the disruption in their travel plans.

 

"We're going to Florida, to Disney World," said one teenage girl, who was devastated by the news. "Our first trip without parents, and now we can't go."

 

Another man recalled "working like a dog waiting for this vacation.

 

"My daughter was dying to go on March break," the man said. "I booked through Jetsgo on the computer and I find out now they've gone bankrupt and I'm stuck. I'll try to get a flight on Air Canada ? or something."

 

Travellers quickly discovered there will be no immediate refunds. And no one was honouring Jetsgo tickets to anywhere.

 

Jetsgo's competitors, their stock prices soaring on the Toronto exchange, had little to promise.

 

"It's a tough time of year to accommodate other customers," said Air Canada spokesperson Laura Cook. "Obviously, the problem at this time of year is that the aircraft are already flying rather full because of March break."

 

While Air Canada would offer its lowest available fares to stranded Jetsgo passengers, Cook noted, "in some cases we only have executive-class seats left."

 

Air Canada managed to help out some by deploying larger aircraft and adding an extra flight between Toronto and Vancouver.

 

"In order to help stranded Jetsgo customers, we'll add seats to destinations where they have the least alternate travel options," said Ben Smith, Air Canada's vice-president of planning.

 

WestJet had words of comfort but little else. Promising to increase capacity by 35 per cent this year, the no-frills airline had little in the way of immediate help.

 

"We're going to do whatever we can to make sure we accommodate everybody we possibly can," WestJet's vice-president of operations, Tim Morgan, said. "We would hate to leave people stranded anywhere, so we'll do what we can."

 

And, while VIA Rail responded by saying "it is ready to assist with passengers' needs," the country's national railway stopped short of offering express trains to Florida. But Enterprise Rent-A-Car quickly offered discounted rates for anyone wanting to rent a car and drive south.

 

Jetsgo's death revived memories of the November, 2001, collapse of Canada 3000, which also stranded thousands of travellers around the globe.

 

The death of that airline, which flew to 108 destinations in Canada and abroad, left Air Canada to focus on WestJet. It also gave Jetsgo a chance to grow, but despite its aggressive expansion and rock-bottom prices, the little airline never seemed to move beyond a seat-of-the-pants operation with its outdated jets.

 

Some analysts questioned its ethics in selling seats and taking money right up until the last minute.

 

"I won't call it shady, but it wasn't right to do that," said Stanley Kershman, a bankruptcy specialist at law firm Perley-Robertson, Hill and McDougall in Ottawa. "They knew they were having financial difficulties way before now."

 

Jetsgo's death could mean fewer seats and higher ticket prices on the country's remaining airlines. Airline analyst Joseph D'Cruz, a University of Toronto professor of management, said Jetsgo had been competing irrationally by cutting fares far below costs, adding the financial stress led to operational problems and, more recently, to alarming safety issues.

 

Jetsgo caused inconvenience to thousands during a Christmas snowstorm when its flights were cancelled and delayed, and earlier this year one of its jets ran off the runway in Calgary while attempting a landing. A Jetsgo plane left parts on a Pearson airport runway on takeoff March 4, and the next day one of its planes had to make an emergency stop in South Carolina with engine problems.

 

Its many problems led Transport Canada earlier this year to order its planes to stay below 29,000 feet, citing problems with Jetsgo's flight manuals, the erratic Calgary landing and other issues.

 

In filing for court protection against creditors, Jetsgo blamed WestJet for much of its troubles, and said it "has reasons to believe that WestJet launched a co-ordinated attack on (Jetsgo's) business, profitability and value."

 

None of Jetsgo's allegations have been proven in court.

 

The Association of Canadian Travel Agents said Jetsgo's collapse could not have come at a worst time.

 

"March is traditionally a month of high demand for air travel because so many students are on holidays," the association said. "To compound the problem, airlines are reporting brisk bookings for the Easter holiday," March 25-27.

 

Jetsgo's failure even caught its employees by surprise. Many thought it was a bad joke when they were called between 12:30 and 2 a.m. yesterday and told not to bother coming in to work.

 

When passenger service agent Courtney Webber got the call she replied: "That's not funny. Don't joke about this."

 

But it wasn't a joke. And Webber certainly isn't laughing.

 

"I enjoyed working for the company," said Webber, in tears. "It was like family."

 

With files from Star staff and Star news services

 

[taylor 0]

Sucks for everyone who got stranded/laid off...pretty damn sudden too, if only they had admitted they were doing so badly. Either way, I'm all about WestJet.

[xboxrulz 0]

Right now Jetsgo is accusing WestJet for hacking their mainframe and stole all their records on their business.xboxrulz

[whyme 0]

omg, sorry, double post.

Edited March 12, 2005 by whyme (see edit history)

[whyme 0]

Yup, more than 1700 people were stranded and without anything. And Spring Break was about to begin too. People will have to realize that the cheapest air fares do not nessaarily mean the best reliabitly. They should have realized that Jetsgo wouldn't last very long, last year, they offered 1$ flights from Vancouver to Toronto, I mean seriously, how can you even make money of of that. And now they're filing for bankrucipie protcetion, just like AirCanada.

[kburrows 0]

My teachers were all mad...They all booked their flights for march break on Jetsgo and oh boy.... I did NOT enjoy my last day before march break...It was however hilarious that the teachers kept getting called by travel agents during class.

[xboxrulz 0]

lol, ya. It was crazy yesterday. Air Canada is now backed by the government, I think it is a crown corporation though.xboxrulz

[eiteljoh 0]

wow. in the US it's the same, budget airlines coming from no-where. i'm always concerned, even when flying with United. im always worried they'll shut down, and not only loose my flight, but also all the frequent flyer miles.really, they'll have to change their name if they do continue to operate - nobody will buy tickets from them after this.kind of funny article though ... the "hardest hit" passenger was going to a curling something???? that's the game with rocks and ice???? good grief!!!!!! you would think it would be someone going to visit their dying mother and had to buy a $4,000 ticket or something ... not having to get another ticket to a curling game. that''s rediculous. i guess canadians really like it.

[whyme 0]

don't be mistaken, curling is REALLY boring, but apparently, it's the only sport that we're good at, becasue no other country plays it. We only have the toronto raptors, (we USED have the grizzlies, damn GST), the only basketball team in Canada, the Expo's from baseball are gone. Essentailly, the only thing that we have left is hockey, o wait, dang it, we've lost that too. (Curse you, Gary Bettman!!!!). So now you see that curling is the #1 sport in Canada, well, in actaul fact, only 0.01% of the Canadian population watched curling.

[Cammy 0]

I know someone who was going to Vegas with Jetsgo and they are not amused. All the more reason to use credit cards for booking flights. All this before March Break and so sudden. Awful timing. I heard that other Canadians are raising their fares!

[whyme 0]

yup, air canada is going to jack up the prices along with westjet now that the famous $1 trips from vancouver to toronto are gone

[no9t9 0]

good riddance to JetsGo... I read in the news that they are one of the worst airlines EVER for passenger safety. They have pages and pages of safety violations and it was just LUCK that nobody died while flying jetsgo. In one case, the pilot damaged the plane on landing and they did not take the plane off the runway. Instead, jetsgo loaded up the plane with more passengers and continued flying. The damage was to the wings and could have basically caused the plane to fall out of the sky.

[xboxrulz 0]

You're right, NAVCAN even barred their planes to not fly over 5000 feet. Which made them guzzle more fuel. Therefore, losing alot of money. Their fleet consisted Boeing 737s and Fokker 100.xboxrulz