Canada Jetlines shelves proposed IPO with Inovent Capital, but says new deal in progress
Plans for a new no-frills airline are in flux after Canada Jetlines Ltd. scrapped a proposed $50-million IPO, but the company’s president said a new deal is in the works
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Plans for a new no-frills airline are in flux after Canada Jetlines Ltd. scrapped a proposed $50-million IPO, but the company’s president said a new deal is in the works.
Jetlines, which plans to offer ultra-cheap flights from Vancouver to secondary airports in Western Canada, announced Friday that a reverse takeover deal with a capital-pool company called Inovent Capital Inc. has been abandoned.
Jetlines president Dave Solloway said the agreement with Inovent expired at the end of January and the fledgling airline decided not to renew it.
“We were approached by some people that we couldn’t even talk to because of the prospectus,” Mr. Solloway said in an interview.
“We decided, okay, we can’t pass up on this opportunity so we decided not to renew it so we could follow up with them.”
Mr. Solloway couldn’t provide any details about the new talks, but confirmed that Jetlines still plans to do an IPO.
The company also reaffirmed plans to begin flying this summer and to proceed with an order for up to 21 of Boeing Co.’s 737 MAX aircraft for delivery beginning in 2021.
“None of that has changed,” Mr. Solloway said. “We just didn’t renew the IPO because we had people come up to us and we had to say to them, ‘We can’t even talk to you.’”
There are two large global companies that finance ultra-low-cost carriers and could be interested in Jetlines, said Robert Kokonis, president and managing director of airline consultancy AirTrav Inc.
The first is Irelandia Aviation, which describes itself as “the world’s premier low-cost carrier developer” and is led by Declan Ryan, the son of Ryanair founder Tony Ryan. Besides Ryanair, it has also invested in Las Vegas-based Allegiant Air, Singapore’s Tigerair and Mexico’s VivaAerobus.
The company didn’t immediately respond to requests for comment, but its website says it is “actively involved in identifying new opportunities to create new airlines.”
The second possibility is Indigo Partners LLC, the investment firm of Bill Franke, who helped pioneer the ultra-low-cost model as chairman of Spirit Airlines. Indigo has invested in Denver-based Frontier Airlines and Hungary’s Wizz Air.
“If Indigo or Irelandia is up here kicking the tires and they think Canada Jetlines has some structural pieces in play, maybe they’d be willing to put some money in there,” Mr. Kokonis said.
“In my mind, those would be the only two groups that would possibly be interested.”
Jetlines plans to embrace the ultra-low-cost model spearheaded by carriers like Ryanair and Spirit Airlines by offering a no-frills experience in exchange for fares that will be 30% to 40% lower than Air Canada and WestJet Airlines, according to the company.
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